In a 4-quart medium saucepan heat the oil over high heat until hot. Add the onion and cook, stirring, until softened, 4 minutes. Add the garlic, salt, red pepper, and bay leaf and cook, stirring, for 1 minute. Add the tomatoes and cook, stirring occasionally, until they begin to soften, about 2 minutes. Add the water, parsley and cilantro and bring to a boil. Add the rice and stir well. When the liquid returns to a boil, stir again, then cover the pot and reduce the heat to low. Cook the rice undisturbed for 20 minutes, or until the liquid is dissolved and the rice is tender.
Let rice stand for 5 minutes undisturbed before fluffing with a fork. Serve immediately.