Cheesy Potato and Bacon Chili

2 tablespoons vegetable oil
1 pound potatoes, peeled, cut into 1/2-inch pieces
1 onion, chopped
2 cloves garlic, minced
1 (28 ounce) can whole peeled tomatoes, broken up, undrained
1 (8 ounce) can tomato sauce
1/2 cup water
1 tablespoon chili powder
1 small green bell pepper, diced
1/4 cup chopped parsley
1/4 cup prepared horseradish
6 strips crisp cooked bacon, crumbled
1/2 cup shredded Cheddar cheese

Heat the oil in a 2-quart pot. Add the potatoes, onion, and garlic. Saut