accented characters in xterm

Hey folks, once agian, Im not ure this qualifies as a bug, but I can't figure out how to fix it on my own. running xemacs21.4.14 on debian-sid(unstable) After a certain amount of fiddling with locales and keymaps, I've managed to get accented characters to work right in almost everything. I can type, for instance, u-umlaut or a-accent-grave atthe bash prompt, in mozilla, and in openoffice without a problem. In xemacs, these characters display properly all the time. At the console and in its own X window (that is, frame), I can also type accented characters without any difficulty. However, I mostly run xemacs with the -nw switch -- for writing emails and also when taking notes on my underpowered laptop. when run within a terminal, xemacs does *not* recognize accented characters when I type them in (though it displays them just fine). Instead, for instance, it interprets 'u-umlaut' as'M-I,' which is bound to 'shell-command-on-region'. iso-accents-mode is a partial fix for this problem, but it doesn't always work and anyway, it's not nearly as convenient as a single-keystroke solution. Is there a way to fix this? Thanks as ususal, matt