Prepare the sauce: Place the olive oil into a wide pot over medium heat. Saute the onion for 3 to 5 minutes, until softened and translucent. Add 1 tablespoon of the ketchup into the pot, stir and cook for another two minutes. Pour in the tomato puree, 1 teaspoon salt, ⅛ t pepper, and 1 cup of water and bring to a boil over medium high heat. Reduce the heat to low and continue cooking the sauce on a gentle simmer for about 10 minutes.

Make the meatballs: Add the beef, 1 tablespoon of ketchup, onion powder, garlic powder, ½ teaspoon salt, ¼ teaspoon pepper, breadcrumbs and egg into a large bowl. Mix until all the ingredients are well combined and smooth. 

Take about 2 tablespoons of the meatball mixture and roll it into a ball. Gently drop the meatball into the simmering tomato sauce. Repeat shaping and dropping the rest of the meatballs into the tomato sauce. Place a lid on the pot and simmer the meatballs and tomato sauce for about 30 minutes until the meatballs have cooked through.

Remove the lid and continue simmering the mixture for about 15 minutes, until the sauce has thickened.

Serve the meatballs and tomato sauce hot with challah.