diff -r 37249c522770 -r 4862a134e2c2 mercurial/hg.py
--- a/mercurial/hg.py	Thu Jun 16 08:37:15 2005 -0800
+++ b/mercurial/hg.py	Thu Jun 16 22:32:55 2005 -0800
@@ -1076,7 +1076,11 @@
                     remove.append(f) # other deleted it
             else:
                 if n == m1.get(f, nullid): # same as parent
-                    self.ui.debug("local created %s, keeping\n" % f)
+                    if p2 == pa: # going backwards?
+                        self.ui.debug("remote deleted %s\n" % f)
+                        remove.append(f)
+                    else:
+                        self.ui.debug("local created %s, keeping\n" % f)
                 else:
                     self.ui.debug("working dir created %s, keeping\n" % f)