Heat oil in medium-size skillet over medium heat. Add green pepper, celery, onion and garlic; sauté until onion is softened, 15 minutes. Add tomatoes, water and salt; simmer over low heat for 30 minutes.
Heat oil in large skillet over high heat. Carefully add wine, sherry, garlic, lemon rind, lemon juice, basil, oregano, pepper and calamari; cook 4 to 6 minutes until calamari is tender; do not overcook. Strain through sieve over bowl.
Return calamari and cooking liquid (should be about 1 cup) to skillet along with red sauce. Heat 1 minute. Serve over cooked linguine. Makes 8 servings.