Coat a large wide pan with olive oil. Add the onions, season with salt and crushed red pepper and bring the pan to a medium heat. Cook the onions until they are soft and very aromatic but have no color, 7 to 8 minutes. Add the garlic and cook for 2 to 3 minutes.
Add the tomatoes, 1/2 cup water, thyme bundle and season with salt. Cook the tomatoes until they become very pulpy and have broken apart, 15 to 20 minutes.
Add the peppers and cook for 5 minutes. Add the eggplant, summer squash and zucchini, season with salt and cook until the squash is soft, 15 to 20 minutes.
Stir in the basil and taste to make sure the seasoning is correct. Serve warm or at room temperature.