Combine mince, rice, egg and half the onion and tomato paste in a medium bowl. Mix well. Roll heaped tablespoons of mixture into balls to make 16 meatballs.
Heat half the oil a large, deep frying pan over moderate heat. Cook and turn meatballs, in batches, for 3-4 minutes or until browned all over. Transfer to a plate.
Heat remaining oil in pan. Add garlic and remaining onion to pan; cook and stir, for 3-4 minutes or until onion is soft. Stir in tomatoes,1 1/2 cups water and remaining tomato paste. Bring to the boil. Reduce heat, cover and simmer for 5 minutes. Add meatballs, simmer, covered, for 25 minutes. Uncover, simmer for 10 minutes or until rice is tender and the sauce is thick. Stir in basil. Serve.