Cook the peanuts in a pan of boiling water for about 30 minutes. Drain and set aside.
To make the spice paste, heat the oil in a large, heavy-based pan over medium heat, add the asafoetida, coriander, sesame seeds, dried red chillies and dal and stir-fry for about 1 minute, or until the spices and chillies are fragrant and the dal changes colour.
Remove from the heat and mix in the coconut and tamarind extract. Transfer to a blender or food processor, add 1/2 cup water and, process to make a smooth paste.
Heat the oil for the tempering in a large frying pan (skillet) over medium heat, add all the ingredients for the tempering, and stir-fry for about 1 minute, or until the mustard seeds start to splutter.
Add the pepper squares, then sprinkle over a little water, cover and simmer for about 10 minutes. Remove from the heat and set aside.
Heat about 250ml / 8fl oz (1 cup) water in a large pan and add the spice paste and jaggery or sugar, then season with salt. Stir and bring to a boil, then reduce the heat and simmer for about 10 minutes.
Add the peanuts and (bell) peppers and simmer for a further 5 minutes until well blended.