Roast the red bell pepper directly over a gas flame or under a preheated broiler, turning, until charred all over; let cool. Discard the charred skin, stem and seeds. Coarsely chop the bell pepper.
In a medium skillet, melt the butter in 1 tablespoon of the olive oil. Add the bread cubes and cook over moderate heat, tossing, until crisp, about 3 minutes. Let cool.
In a food processor, combine the roasted pepper, toasted bread cubes, sherry vinegar, tomato paste, garlic and hazelnuts and puree. With the machine on, slowly pour in the remaining 1/4 cup of olive oil. Season the romesco sauce with salt and pepper.
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