Heat the oil in a medium saucepan over medium heat. Add the shallot and cook, stirring, until tender, 3 to 5 minutes. Add the potato, bay leaf, nutmeg, 1/2 teaspoon salt and a few grinds of pepper and cook, stirring, until the potatoes are well coated, 2 to 3 minutes more. Pour in the water and bring to a simmer.
Add the bell pepper and tomatoes and simmer until the potatoes and vegetables are tender, about 20 minutes, adjusting the heat as needed to maintain a simmer. Remove from the heat, discard the bay leaf and let cool at least 5 minutes. Carefully puree until smooth with a handheld immersion blender or in 2 to 3 batches in a blender (do not fill the blender more than halfway full per batch).
Stir in the cream and reheat the soup if necessary, adjusting the consistency and seasoning with additional water, salt and pepper.
Serve hot sprinkled with crispy shallots and chives.
The shallots can be bought already fried in specialty Asian stores. When blending hot liquid, first let it cool for 5 minutes or so, then transfer it to a blender, filling only halfway. Put the lid on, leaving one corner open. Cover the lid with a kitchen towel to catch splatters and pulse until smooth.
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