Heat olive oil in large chicken fryer. Add onion, green pepper, and garlic; cook until transparent. Blend in remaining sauce ingredients. Cover and simmer gently over low heat for 30 minutes.
For meatballs: Combine all ingredients; adding the bread crumbs, egg and warm milk last. Shape mixture into 18-20 balls about 2 1/2 inches in diameter. Melt 1/4 cup margarine in large frying pan. Brown meat balls on all sides and place into hot, cooked sauce. Cover and simmer 30 minutes.
By Robin from Washington, IA
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