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2.In a large saucepan over medium heat, saute onion and garlic in olive oil until onion is translucent. Stir in tomatoes, salt, sugar and bay leaf. Cover, reduce heat to low, and simmer 90 minutes. Stir in tomato paste, basil, 1/2 teaspoon pepper and meatballs and simmer 30 minutes more. Serve.
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