Cut bell peppers in half lengthwise, and discard seeds and membranes. Place pepper halves, skin sides up, on a foil-lined baking sheet; flatten with hand. Broil 8 minutes or until blackened. Place in a zip-top plastic bag; seal. Let peppers stand 5 minutes. Peel and cut into strips.
Heat 1 tablespoon oil in a deep 10-inch cast-iron skillet over medium heat. Add potatoes, tossing to coat. Spread potatoes in a single layer in pan. Sprinkle with 1 tablespoon basil, 1/4 teaspoon salt, 1/8 teaspoon black pepper, and 1/3 of garlic. Arrange onion, zucchini, and squash over seasonings. Sprinkle with 1 tablespoon basil, 1/4 teaspoon salt, remaining 1/8 teaspoon black pepper, and 1/3 of garlic. Top with roasted bell peppers, remaining 2 tablespoons basil, remaining 1/3 of garlic, and tomatoes. Drizzle remaining 1 tablespoon oil and water over top; sprinkle with remaining 1/2 teaspoon salt. Cover, reduce heat to low, and cook 25 minutes or until vegetables are tender. Uncover; increase heat to high, and cook 3 minutes or until liquid almost evaporates. Garnish with parsley, if desired.