In a medium saucepan, over medium heat, add olive oil. Stir in onion and carrots. Saute for about 3 minutes to begin to soften the vegetables.
Mix in the garlic, Italian seasoning, ground fennel, sugar, salt, and pepper. Stir for about 1 minute to blend flavors.
Pour in the crushed tomatoes, tomato paste, and bay leaf.
Bring mixture to a boil. Reduce heat to low, cover pot and simmer about 20 minutes, stir occasionally.
Remove and discard the bay leaf.
If a smooth sauce is desired, use an immersion blender to puree the ingredients.
Taste for seasoning, reseason if needed. If desired, sprinkle with fresh basil or parsley. Serve over pasta, chicken, with meatballs, etc.