Combine ground beef, bread crumbs and egg in medium bowl; shape into 12 meatballs. Press 1 cheese cube into each meatball, enclosing completely.
Bring sauce to a boil in large saucepan over medium-high heat. Gently stir in uncooked meatballs.
Reduce heat to low and simmer covered, stirring occasionally, 20 minutes or until meatballs are done. Serve over hot spaghetti.