Gutsy Red Pepper Gazpacho

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2 red bell peppers, seeded and coarsely chopped

2 teaspoons sugar

1 jalapeno pepper, seeded and chopped

2 slices white bread, crust removed and chopped

2 cloves garlic, crushed

1 cup tomato sauce

1 (28-ounce) can stewed diced tomatoes

1/2 cup water

2 tablespoons sherry vinegar or red wine vinegar

1/4 cup extra-virgin olive oil

Coarse salt

1/2 red onion, finely chopped

Blue corn tortilla chips