Hot Ham and Potato Salad

1/2 medium onion, finely chopped
1/2 bell pepper, finely chopped
1/2 stick (4 Tbl.) margarine or butter
1/4 c. flour
1 c. milk
1/4 tsp. salt
1/4 tsp. pepper
1/4 lb. Velveeta cheese1 c. cubed cooked ham
1 1/2 c. cooked diced potatoes

Saute onion and bell pepper in margarine or butter until wilted. Stir in flour, mixing well. Slwoly add milk and seasomings. Add cheese. Stir until cheese melts and sauce thickens slightly. Do not overcook. Add ham and potatoes and pour into a 1 quart baking dish. Bake, uncovered, for about 20 minutes at 350 degrees F. Serves 4.