Assume xterm has 256 colors

.znewterm

@@ -28,6 +28,18 @@ then
 	TERM=xterm
 fi
 
+if [[ $TERM == xterm ]]
+then
+        for t in xterm-256color xterm+256color
+        do
+                if [[ -f /usr/share/terminfo/x/$t ]]
+                then
+                        TERM=$t
+                        break
+                fi
+        done
+fi
+
 case "$TERM" in
     xterm*|screen)
 	# indicated exit status by smiley (suggested by Stig Sandbeck Mathisen)