Meatballs In Pasta Nests

2 tablespoon olive oil 1 cup finely chopped carrots (2 medium) 1 cup finely chopped onion (1 large) 1 cup finely chopped fennel (1 medium) ¼ teaspoon salt ¼ teaspoon ground black pepper ⅓ cup snipped fresh parsley 1 tablespoon finely shredded lemon peel