Cook squash in water, stirring frequently, until they are completely broken down. Drain and set aside. Saute onions and bell peppers in melted butter, until the vegetables are tender. Add the squash and mix thoroughly. Stir in the next three ingredients,and cook 5 more minutes. Stir in the pimentos and the olives. Transfer squash mixture to baking dish, place in oven, and bake 30 minutes.