Combine olives and lemon juice in medium bowl. Let marinate at least 3 hours at room temperature, tossing occasionally. (Can be made 1 day ahead. Cover and chill.)
Heat oil in heavy large pot over medium heat. Add onions and sauté 5 minutes. Add potatoes, paprika, black pepper, cayenne pepper, and olives with lemon juice; stir to blend. Add 1 1/2 cups water and bring to boil. Cover, reduce heat to medium-low, and simmer until potatoes are tender, stirring occasionally, about 15 minutes. Mix in tomatoes. Simmer uncovered until flavors blend, about 10 minutes longer. Season stew with salt. Transfer to bowl. Garnish with lemon wedges.