Combine ground beef, egg, breadcrumbs, salt, parsley, garlic, parmesan cheese, and water in a bowl.

Mix lightly until just combined.

Shape the mixture into approximately 24 meatballs.

Heat butter in a large Dutch oven.

Sauté the meatballs in batches until browned on all sides.

Remove the meatballs from the pot and set aside.

Drain excess fat from the Dutch oven.

Combine beef broth, diced tomatoes, onion soup mix, carrots, potatoes, celery (optional), parsley, pepper, oregano, basil, and bay leaf in the Dutch oven with water.

Bring the mixture to a boil, then reduce heat and simmer, covered, for 30 minutes, stirring occasionally.

Add the meatballs back to the soup.

Simmer for an additional 20-30 minutes, or until the vegetables are tender and the meatballs are cooked through.

Serve hot, garnished with Parmesan cheese.

If the soup is too thick, add water to thin to desired consistency.