In a medium Dutch oven, heat olive oil over medium heat. Add onion and cook until onions are golden brown, about 10 minutes. Stir in garlic and cook for 1 minute.
Add the water, increase heat to medium-high and bring to a boil. Remove from heat and stir in the rice. Cover and bake about 60 minutes or until the rice is cooked through.
Remove the pot from the oven, uncover and fluff the rice with a fork. Stir in parsley and season with salt and pepper to taste. Serve warm.