Chop onion, carrot, green pepper, celery and mince garlic.
In a large saucepan cook meat, mushrooms, onion, carrot, green pepper, celery, and garlic till meat is no longer pink and vegetables are tender. Drain off any fat.
Stir in undrained tomatoes, tomato paste, water (or red wine if preferred) basil, oregano, 1 small bay leaf, 1/4 teaspoon salt, and 1/8 teaspoon pepper. Bring to boiling; reduce heat. Cover and simmer for 30 minutes, stirring occasionally. Remove bay leaf.
Combine 1 teaspoon cornstarch and 1 tablespoon of cold water. Stir into sauce. Cook and stir till thickened and bubbly. Cook and stir for 2 minutes more.
Meanwhile, cook spaghetti according to package directions. Drain well.
Serve sauce over spaghetti.