Preheat oven to 425 degrees. Cover large baking sheet with foil; set aside.
To roast bell peppers, cut peppers in half; remove stems, seeds and membranes. Place peppers, cut sides down, on prepared baking sheet. Bake 20 to 25 minutes or until skins are browned.
Transfer peppers from baking sheet to paper bag; close bag tightly. Let stand 10 minutes or until peppers are cool enough to handle and skins are loosened. Using sharp knife, peel off skins; discard skins. Cut peppers into strips.
Trim ends from bread; discard. Cut loaf lengthwise in half. Remove soft insides of loaf; reserve removed bread for another use, if desired.
Brush 1/4 cup Italian dressing evenly onto cut sides of bread. Arrange pepper strips in even layer in bottom half of loaf; top with even layer of onion. Brush onion with remaining 2 tbsp. Italian dressing; top with layer of basil and cheese. Replace bread top. Wrap loaf tightly in heavy-duty plastic wrap; refrigerate at least 2 hours or overnight.
When ready to serve, remove plastic wrap. Cut loaf crosswise into 1-inch slices. Secure with toothpicks and garnish, if desired.