Preheat oven to 400°F.
Char bell peppers over a gas-stove flame using long tongs, or broil on a foil-lined baking sheet until skin is blackened. Let cool enough to handle; remove skin and seeds. Cut into thin slices and set aside.
In heat-safe skillet, add oil over low heat. Add tomato seeds and caramelized onions and cook, stirring; add water to just cover onions. Increase heat to high and cook, stirring, until all the water evaporates. Add water again to just cover and cook until it evaporates. Repeat four or five times until the onion becomes almost a purée.
Stir in reserved peppers, tomatoes and smoked paprika over high heat, cooking until the mixture is reduced and saucy, 3 to 4 minutes, adding a few tablespoons of water if needed.
Add feta to skillet; bake until cheese becomes soft and slightly golden, 15 to 20 minutes.
Top feta with dressing and freshly cracked pepper and serve with crusty bread for dipping. It also makes an excellent sauce for pasta.