In a shallow bowl, sprinkle yeast on top of water. Leave for 5-10 minutes, until yeast turns foamy.
In the bowl of an electric mixer, combine flours, salt and sugar. Add olive oil, pesto and proofed yeast. Using dough hook attachment, knead for 5 minutes, until dough is soft and elastic. Place in a bowl lightly greased with olive oil. Cover with plastic wrap and a kitchen towel. Leave to rise for 2 hours. Dough will be not quite doubled in volume.
Preheat oven to 400 F. Place a piece of parchment paper on a cookie sheet. Spray with non stick spray.
On a lightly floured board, roll out dough to a square approximately 13x13". Slice into 1" slices vertically. Cut in half once horizontally. Form into knots by forming a loop and then passing one end through the loop. Place on prepared cookie sheet. Cover with a clean tea towel for 1/2 hour.
Make pesto butter by combining butter and pesto. Mix to combine.
Bake for 10 minutes. Brush with pesto butter. Bake another 5 minutes.