Into large bowl, measure 2 cups of the flour. Set aside. Into a blender jar,.
Pour the water, yeast, and remaining cup of flour. Cover and blend at low speed. Uncover and continue blending while adding the oil, sugar, large egg, and salt. Blend until mixture is smooth.
Pour batter over the reserved flour. Mix thoroughly with a spoon until a ball of dough forms. Place in a lightly greased bowl turning to grease all sides. Cover and let rise in a warm draft-free place for 1 ½ hours or until doubled in bulk. Stir down.
Shape the dough into challas, braided or unbraided. To shape into 2 small braided challas, divide the dough in half. Divide each part into 3 equal parts. Roll each part into a long coil of even thickness. Pinch together the tops of all 3 pieces. Start to braid by taking the outer right strip and crossing it over the center strip, bringing it to the center. Then take the outer left strip and cross it over the middle strip, bringing it to the center.
Repeat the procedure by alternately bringing the right strip to the center until all are braided. Pinch the ends together. Tuck the ends in carefully. Transfer the bread to a greased loaf pan, 9 5/8 x 5 ½ x 2 ¾ inches. Repeat with remaining dough. If you choose to make one large challah, use a 9 x 13 x 2-inch baking pan.
For a round challah, shape the dough round with your cupped hands. Place in greased 9-inch pan (round).
Cover and let rise in a warm place until doubled in bulk, about 1 hour.
Preheat oven to 375 degrees F.
Beat the remaining egg with the tablespoon of water just to blend. Brush the top of the breads with the egg wash. Sprinkle sesame or poppy seeds if desired. Bake for about 40 minutes, until breads are well browned and sound hollowed when tapped with knife handle or spoon. Remove to racks to cool.