Baked Spaghetti Casserole

1 c. chopped onion
1 c. chopped green pepper
1 lb. ground beef
1 (28oz) can diced tomatoes
1 (4oz) can mushrooms
1 can sliced olives
1 can tomato sauce
2 tsp. dried oregano
12oz. cooked spaghetti
2 c. shredded cheddar cheese
1 can cream of mushroom soup
1/4 c. water
1/4 c. Parmesan cheese

Brown beef with onion and green pepper. Add tomatoes, mushrooms, olives, oregano and tomato sauce. Simmer for 10 minutes. Place half spaghetti in baking dish. Top with half of the vegetable mixture and 1 cup cheddar cheese. Repeat layers. Mix the soup and water until smooth and pour over casserole. Sprinkle with Parmesan cheese. Bake, uncovered at 350 for 30-35 minutes or until heated through.