Vegetarian Stuffed Peppers

1 Tbs. olive oil
1 medium onion, chopped
2 garlic cloves, finely chopped
8 oz mushrooms, trimmed and thinly sliced
½ cups rice
1 2/3 cups water
1 Tbs. basil
½ tsp salt
½ tsp black pepper
4 red, yellow and/or green peppers
Preheat oven to 400. In a 3 qt. saucepan, heat oil over medium low heat. Add onion and garlic and cook, stirring frequently, until onion is tender, about 5 minutes. Add mushrooms and cook, stirring frequently, until mushrooms are tender, and liquid evaporated, about 5 minutes. Add rice, 1 cup water, basil, salt and pepper; heat to boiling. Reduce heat; cover and simmer until rice is tender and liquid has been absorbed, about 20 minutes.
Meanwhile, cut off top from each pepper; reserve tops. Remove seeds ad cut a thin slice from the bottom of each pepper so it will sit flat. In a 5 qt. saucepot, heat 3 qts water to boiling. Add peppers and their tops and cook 5 minutes. Remove and place stem side down on paper towels to drain. When drained, stand peppers in an 8-inch square baking dish. Spoon rice mixture into peppers and replace tops. Pour remaining 2/3 cup water into baking dish. Cover with foil and bake until peppers are tender, about 30 minutes.