Combine the rice and water in a saucepan, and bring to a boil. Cover, reduce heat to low, and simmer for 15 to 20 minutes, until rice is tender and the water has been absorbed. Set aside.
Preheat the oven to 350 degrees F (175 degrees C).
Heat a large skillet over medium heat. Add the bacon, and brown on each side. Add the onion, garlic and green peppers to the skillet, and cook until soft, stirring frequently. Mix in the sausage, and cook until hot, then pour in the tomatoes. Cook just until heated through. Stir in the cooked rice and spaghetti sauce. Season with Italian seasoning, salt and pepper. Transfer to a large casserole dish, and cover with a lid or aluminum foil.
Bake for 1 hour in the preheated oven, then remove the lid, and cook for an additional 15 minutes.