Preheat oven to 375 degrees F (190 degrees C).

Heat oil in a medium skillet over medium heat, add onion and cook for four minutes until soft. Stir in garlic and cook one minute.

Slice tops off peppers and remove seeds. Stand peppers upright in a a 9x12-inch baking dish.

In large bowl, combine onion mixture, dill, salt, allspice and pepper. Mix in rice and lamb, fold in feta cheese. Stuff peppers with mixture.

Mix tomato sauce with water, lemon juice and sugar. Pour half over peppers, and half over bottom of dish. Cover with foil.

Bake in the preheated oven for 45 minutes. Uncover and continue baking 15 minutes, basing occasionally with sauce, until a meat thermometer inserted in center of filling reads 160 degrees F (70 degrees C).