Heat ½ tablespoon of olive oil in a 12-inch heavy skillet over moderately high heat until hot but not smoking, then add half of the squash and sauté, stirring occasionally, until browned, about 5 minutes.
Transfer the browned squash to a bowl, then heat the remaining tablespoon of oil and sauté the remaining squash in the same manner.
Return the squash in the bowl to the skillet. Add the garlic and sauté, stirring occasionally, 1 minute. Add the water, salt and pepper and simmer briskly, covered, until the squash is tender and most of liquid is evaporated, 6 to 7 minutes. Stir in the basil; serve.