In a large bowl, dissolve yeast in warm water. Add the sugar, salt, 2 tablespoons oil and 2-1/2 cups flour. Beat until smooth. Stir in enough remaining flour to form a soft dough (dough will be sticky).
Turn onto a lightly floured surface; knead until smooth and elastic, about 6-8 minutes. Cover and let rest 10 minutes.
On a lightly floured surface, roll dough into a 15-in. circle. Transfer to a greased 14-in. pizza pan, letting dough drape over the edge. Cut string cheese pieces in half lengthwise; place around edge of pan. Fold dough over string cheese; pinch to seal.
Prick dough thoroughly with a fork. Brush with remaining oil; sprinkle with Italian seasoning. Bake at 425° for 10-12 minutes or until golden brown.
In a small saucepan, combine the sauce ingredients. Bring to a boil. Reduce heat; simmer, uncovered, for 15 minutes. Spread over crust. Arrange pepperoni over top; sprinkle with Italian cheese blend. Bake for 10-15 minutes or until cheese is melted.