Flatten steak to 1/2-in. thickness. Rub with 1 tablespoon oil. Combine the bread crumbs, parsley, Parmesan cheese, garlic, oregano, 1/4 teaspoon salt and 1/4 teaspoon pepper. Spoon over beef to within 1 in. of edges; press down. Roll up jelly-roll style, starting with a long side; tie with kitchen string.
In a Dutch oven, brown meat in remaining oil on all sides. Add onion and cook until tender. Stir in the tomato sauce, water, Italian seasoning, sugar and remaining salt and pepper. Bring to a boil. Reduce heat; cover and simmer 70-80 minutes or until meat is tender.
Remove meat from sauce and discard string. Cut into thin slices; serve with sauce and If desired, spaghetti and additional grated Parmesan cheese and minced fresh parsley.