Combine the meat with salt and pepper to taste but do not overwork it. Shape the meat into balls about one inch in diameter.

Cook the meat balls, onions, garlic and mushrooms in the olive oil, shaking the pan gently so that the meat balls will cook on all sides without breaking. When the onions are golden yellow, add the tomato paste, water, basil and bay leaf. Simmer for about thirty minutes, until the sauce is thickened.

Cook the spaghetti according to package directions; drain. Dress it with the meat balls and sauce and serve the grated cheese separately.