In a large skillet cook bacon until crisp. Drain bacon on paper towels, reserving 2 tablespoons drippings in skillet. Crumble bacon; set aside. Combine potatoes, chopped onion, and sweet pepper; pat into the skillet. Cook, uncovered, over low heat about 7 minutes or until crisp and brown, turning once.
Meanwhile, in a small mixing bowl beat together eggs, milk, salt, and black pepper; pour over potato mixture. Top with cheese and bacon. Cover; cook over low heat for 5 to 7 minutes or until egg mixture is set. Loosen omelet; fold in half. Turn out of skillet onto plate. Cut into wedges to serve. If desired, garnish with green onions. Makes 4 servings.