Combine first 5 ingredients in a small bowl, stirring well. Shape mixture into 8 meatballs. Arrange meatballs on rack of a broiler pan coated with cooking spray. Broil 5 1/2 inches from heat (with electric oven door partially opened) 10 to 12 minutes or until done, turning once. Set aside; keep warm.
Heat margarine in a small saucepan over medium-high heat until margarine melts. Add green pepper and next 4 ingredients; saute until onion is tender. Stir in tomato sauce and mushrooms; cook until thoroughly heated. Add meatballs, and stir until coated. Serve immediately.