In a small bowl soak bread in water for 2 or 3 minutes, then squeeze out moisture and tear into small pieces. In a medium bowl combine bread with remaining ingredients (except olive oil and ingredients for the sauce) and mix well. Form into small balls ( I form the meatballs into the size of a golf ball). In a medium frying pan with the 2 tablespoons of olive oil, brown meatballs on all sides. While meatballs are browning, in a separate, medium sized, deep pan add all ingredients for the sauce, stirring until well combined. Add browned meatballs. Over medium heat, heat to boiling, then lower heat to medium low and simmer for 20 minutes (covered), than raise heat to medium, (leave pan slightly uncovered 1/3 uncovered) and cook an additional 20 minutes, until sauce has thickened. Serve immediately, top with freshly grated parmesan cheese if desired. Don't forget some crusty Italian bread to soak up the delicious sauce. Enjoy!
**If you decide to bake the meatballs, shred approximately 1/3 cup of firm mozzarella on top and bake in the oven until melted, make sure you use an oven safe frying pan.