In a heavy-bottomed pan, heat 1/2 cup of the olive oil. When hot, but not smoking, add the osso buco and cook until golden brown on all sides, about 6-8 minutes. Remove the pan from the heat.
Preheat the oven to 375 degrees F.
Transfer the shanks to a covered, heavy baking dish just large enough to hold the shanks comfortably. Set aside.
In the same pot, heat 2 tablespoons of olive oil over medium heat. Stir in the tomato paste and cook for 2 minutes, stirring occasionally. Stir in the olives, capers, peppers, tomatoes, oregano, and sugar. Deglaze with the Marsala. Season, to taste, with salt and pepper. Let simmer for 10 minutes, stirring often. If the mixture becomes too dry, add a teaspoonful or 2 of water.
Spoon equal amounts of the sauce over each shank. Cover and cook until the veal is very tender, about 45 minutes.