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In nonstick 10-inch skillet with oven-safe handle (or cover handle with heavy-duty foil for baking in oven later) heat olive oil over medium heat; add potatoes, onion, green pepper, and 1/4 teaspoon salt, and cook until vegetables are tender, about 20 minutes, stirring occasionally.
Meanwhile, preheat oven to 400 degrees F. In medium bowl, with wire whisk or fork, beat eggs with pepper, 1/2 teaspoon salt, and 1/2 cup water. Stir in tomatoes and olives. Stir egg mixture into potato mixture in skillet and cook, covered, 5 minutes or until egg mixture begins to set around edge. Remove cover and place skillet in oven; bake 15 to 20 minutes, until omelet is set.
Carefully invert omelet onto large, flat plate. Let cool before cutting into 1-inch squares. Garnish with chives.
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