To make meatballs: Combine in a bowl ground beef, bread crumbs, milk, egg, garlic, onions, salt, parsley and pepper; mix well. Roll into 1 inch balls and set aside.
Heat oil in large skillet over medium heat; add meatballs and cook gently so they stay whole and are lightly browned.
To make the sauce: Mix together tomato soup, water, lemon juice, salt, parsley, basil, sage, thyme and cayenne pepper in a large saucepan, add meatballs and simmer for 1 hour.