Heat oil in large saucepan or Dutch oven. Add onion, green pepper and garlic; cook until vegetables are tender, about 10 minutes. If vegetables begin to brown or stick, add 2 tablespoons water.
Stir in undrained tomatoes, tomato paste, brown sugar, oregano, salt, basil, thyme, bay leaf and water; simmer over medium heat for 1 to 2 hours or until sauce has thickened to desired consistency.
Remove bay leaf. Serve sauce over hot spaghetti. Makes fourteen 1/2-cup servings.