'Gbnome Terminal' does not exactly emulate 'xterm' ..
from: Wikipedia >> GNOME Terminal
GNOME Terminal emulates the xterm terminal emulator and provides some of the same features.
A treatise on the issue and solution(s) can be found here:
Linux Backspace/Delete mini-HOWTO
Every Linux user has been sooner or later trapped in a situation in which having working Backspace and Delete keys on the console and on X
seemed impossible. This paper explains why this happens and suggests
solutions. The notions given here are essentially
distribution-independent: due to the widely different content of
system configuration files in each distribution, I will try to give
the reader enough knowledge to think up his/her own fixes, if
I assume that the Backspace key should go back one character and then
erase the character under the cursor. On the other hand, the Delete
key should delete the character under the cursor, without moving it.
If you think that the function of the two keys should be exchanged, in
spite of the fact that most keyboards feature an arrow pointing to the
left (←) on the Backspace key, then this paper will not give you
immediate solutions, but certainly you may find the explanations given
Simplest solution given (which may work here) is to use: bash$ export TERM=gnome