Saute the onion, garlic and the red bell pepper in the oil in a large pot for 5 to 7 minutes. Add the mushrooms, canned tomatoes with the juice, and the fresh tomatoes, stirring well to combine all ingredients. Add the olives, the stir in the tomato paste. Sprinkle the sugar, salt, pepper, oregano and basil over the mixture, and place the bay leaves in the pot. Mix well. Bring the mixture to a boil, lower to simmer, cover and cook about 2 hours. Remove the bay leaves before serving.