diff --git a/frontend/src/services/actions.ts b/frontend/src/services/actions.ts
index ee6a1b1a0071..238bcdc3d99e 100644
--- a/frontend/src/services/actions.ts
+++ b/frontend/src/services/actions.ts
@@ -1,6 +1,5 @@
 import { addAssistantMessage, addUserMessage } from "#/state/chatSlice";
 import { setCode, setActiveFilepath } from "#/state/codeSlice";
-import { appendInput } from "#/state/commandSlice";
 import { appendJupyterInput } from "#/state/jupyterSlice";
 import {
   ActionSecurityRisk,
@@ -56,12 +55,6 @@ const messageActions = {
     if (message.args.thought) {
       store.dispatch(addAssistantMessage(message.args.thought));
     }
-    if (
-      !message.args.is_confirmed ||
-      message.args.is_confirmed !== "rejected"
-    ) {
-      store.dispatch(appendInput(message.args.command));
-    }
   },
   [ActionType.RUN_IPYTHON]: (message: ActionMessage) => {
     if (message.args.thought) {
diff --git a/openhands/agenthub/codeact_agent/codeact_agent.py b/openhands/agenthub/codeact_agent/codeact_agent.py
index cacd68353732..ad748a89d85a 100644
--- a/openhands/agenthub/codeact_agent/codeact_agent.py
+++ b/openhands/agenthub/codeact_agent/codeact_agent.py
@@ -139,7 +139,9 @@ def get_observation_message(self, obs: Observation) -> Message | None:
         max_message_chars = self.llm.config.max_message_chars
         obs_prefix = 'OBSERVATION:\n'
         if isinstance(obs, CmdOutputObservation):
-            text = obs_prefix + truncate_content(obs.content, max_message_chars)
+            text = obs_prefix + truncate_content(
+                obs.content + obs.interpreter_details, max_message_chars
+            )
             text += (
                 f'\n[Command {obs.command_id} finished with exit code {obs.exit_code}]'
             )
diff --git a/openhands/agenthub/codeact_swe_agent/codeact_swe_agent.py b/openhands/agenthub/codeact_swe_agent/codeact_swe_agent.py
index d35acb63c810..d0d0c0fdc8de 100644
--- a/openhands/agenthub/codeact_swe_agent/codeact_swe_agent.py
+++ b/openhands/agenthub/codeact_swe_agent/codeact_swe_agent.py
@@ -112,7 +112,9 @@ def get_action_message(self, action: Action) -> Message | None:
     def get_observation_message(self, obs: Observation) -> Message | None:
         max_message_chars = self.llm.config.max_message_chars
         if isinstance(obs, CmdOutputObservation):
-            text = 'OBSERVATION:\n' + truncate_content(obs.content, max_message_chars)
+            text = 'OBSERVATION:\n' + truncate_content(
+                obs.content + obs.interpreter_details, max_message_chars
+            )
             text += (
                 f'\n[Command {obs.command_id} finished with exit code {obs.exit_code}]'
             )
diff --git a/openhands/controller/agent_controller.py b/openhands/controller/agent_controller.py
index 55ca61ddddee..3bd2f484261e 100644
--- a/openhands/controller/agent_controller.py
+++ b/openhands/controller/agent_controller.py
@@ -224,8 +224,7 @@ async def _handle_observation(self, observation: Observation):
         """
         if (
             self._pending_action
-            and hasattr(self._pending_action, 'is_confirmed')
-            and self._pending_action.is_confirmed
+            and getattr(self._pending_action, 'is_confirmed', None)
             == ActionConfirmationStatus.AWAITING_CONFIRMATION
         ):
             return
@@ -458,8 +457,7 @@ async def _step(self) -> None:
 
         if not isinstance(action, NullAction):
             if (
-                hasattr(action, 'is_confirmed')
-                and action.is_confirmed
+                getattr(action, 'is_confirmed', None)
                 == ActionConfirmationStatus.AWAITING_CONFIRMATION
             ):
                 await self.set_agent_state_to(AgentState.AWAITING_USER_CONFIRMATION)
diff --git a/openhands/events/observation/commands.py b/openhands/events/observation/commands.py
index 90a3690b589b..a182168e694a 100644
--- a/openhands/events/observation/commands.py
+++ b/openhands/events/observation/commands.py
@@ -13,6 +13,7 @@ class CmdOutputObservation(Observation):
     exit_code: int = 0
     hidden: bool = False
     observation: str = ObservationType.RUN
+    interpreter_details: str = ''
 
     @property
     def error(self) -> bool:
diff --git a/openhands/runtime/action_execution_server.py b/openhands/runtime/action_execution_server.py
index 719d206e5a1b..b81b5d4747c0 100644
--- a/openhands/runtime/action_execution_server.py
+++ b/openhands/runtime/action_execution_server.py
@@ -37,6 +37,7 @@
     FileWriteAction,
     IPythonRunCellAction,
 )
+from openhands.events.event import EventSource
 from openhands.events.observation import (
     CmdOutputObservation,
     ErrorObservation,
@@ -434,6 +435,7 @@ async def run(self, action: CmdRunAction) -> CmdOutputObservation:
             ), f'Timeout argument is required for CmdRunAction: {action}'
             commands = split_bash_commands(action.command)
             all_output = ''
+            python_interpreter = ''
             for command in commands:
                 if command == '':
                     output, exit_code = self._continue_bash(
@@ -454,21 +456,31 @@ async def run(self, action: CmdRunAction) -> CmdOutputObservation:
                         keep_prompt=action.keep_prompt,
                         kill_on_timeout=False if not action.blocking else True,
                     )
+                    # Get rid of the python interpreter string from each line of the output.
+                    # We need it only once at the end.
+                    parts = output.rsplit('[Python Interpreter: ', 1)
+                    output = parts[0]
+                    if len(parts) == 2:
+                        python_interpreter = '[Python Interpreter: ' + parts[1]
                 if all_output:
-                    # previous output already exists with prompt "user@hostname:working_dir #""
-                    # we need to add the command to the previous output,
-                    # so model knows the following is the output of another action)
-                    all_output = all_output.rstrip() + ' ' + command + '\r\n'
+                    # previous output already exists so we add a newline
+                    all_output += '\r\n'
 
-                all_output += str(output) + '\r\n'
+                # If the command originated with the agent, append the command that was run...
+                if action.source == EventSource.AGENT:
+                    all_output += command + '\r\n'
+
+                all_output += str(output)
                 if exit_code != 0:
                     break
+
             return CmdOutputObservation(
                 command_id=-1,
                 content=all_output.rstrip('\r\n'),
                 command=action.command,
                 hidden=action.hidden,
                 exit_code=exit_code,
+                interpreter_details=python_interpreter,
             )
         except UnicodeDecodeError:
             raise RuntimeError('Command output could not be decoded as utf-8')
diff --git a/tests/runtime/test_bash.py b/tests/runtime/test_bash.py
index cfe480102d79..cdf760bacf9d 100644
--- a/tests/runtime/test_bash.py
+++ b/tests/runtime/test_bash.py
@@ -97,7 +97,7 @@ def test_bash_timeout_and_keyboard_interrupt(temp_dir, box_class, run_as_openhan
         obs = runtime.run_action(action)
         assert isinstance(obs, CmdOutputObservation)
         assert obs.exit_code == 0
-        assert '/workspace' in obs.content
+        assert '/workspace' in obs.interpreter_details
 
     finally:
         _close_test_runtime(runtime)
@@ -121,7 +121,7 @@ def test_bash_pexcept_eof(temp_dir, box_class, run_as_openhands):
         logger.info(obs, extra={'msg_type': 'OBSERVATION'})
         assert isinstance(obs, CmdOutputObservation)
         assert obs.exit_code == 0
-        assert '/workspace' in obs.content
+        assert '/workspace' in obs.interpreter_details
 
         # run it again!
         action = CmdRunAction(command='python3 -m http.server 8080')
@@ -139,7 +139,7 @@ def test_bash_pexcept_eof(temp_dir, box_class, run_as_openhands):
         obs = runtime.run_action(action)
         assert isinstance(obs, CmdOutputObservation)
         assert obs.exit_code == 0
-        assert '/workspace' in obs.content
+        assert '/workspace' in obs.interpreter_details
     finally:
         _close_test_runtime(runtime)
 
@@ -190,7 +190,7 @@ def test_process_resistant_to_one_sigint(temp_dir, box_class, run_as_openhands):
         obs = runtime.run_action(action)
         assert isinstance(obs, CmdOutputObservation)
         assert obs.exit_code == 0
-        assert '/workspace' in obs.content
+        assert '/workspace' in obs.interpreter_details
         assert 'resistant_script.sh' in obs.content
 
     finally:
@@ -243,7 +243,7 @@ def test_process_resistant_to_multiple_sigint(temp_dir, box_class, run_as_openha
         obs = runtime.run_action(action)
         assert isinstance(obs, CmdOutputObservation)
         assert obs.exit_code == 0
-        assert '/workspace' in obs.content
+        assert '/workspace' in obs.interpreter_details
         assert 'resistant_script.sh' in obs.content
 
     finally:
@@ -264,7 +264,7 @@ def test_multiline_commands(temp_dir, box_class):
         assert 'hello\r\nworld' in obs.content
 
         # test whitespace
-        obs = _run_cmd_action(runtime, 'echo -e "\\n\\n\\n"')
+        obs = _run_cmd_action(runtime, 'echo -e "a\\n\\n\\nz"')
         assert obs.exit_code == 0, 'The exit code should be 0.'
         assert '\r\n\r\n\r\n' in obs.content
     finally:
@@ -312,7 +312,6 @@ def test_multiple_multiline_commands(temp_dir, box_class, run_as_openhands):
         assert 'hello -v' in obs.content
         assert 'hello\r\nworld\r\nare\r\nyou\r\nthere?' in obs.content
         assert 'hello\r\nworld\r\nare\r\nyou\r\n\r\nthere?' in obs.content
-        assert 'hello\r\nworld "\r\n' in obs.content
     finally:
         _close_test_runtime(runtime)
 
@@ -604,13 +603,13 @@ def test_keep_prompt(box_class, temp_dir):
 
         obs = _run_cmd_action(runtime, f'touch {sandbox_dir}/test_file.txt')
         assert obs.exit_code == 0
-        assert 'root@' in obs.content
+        assert 'root@' in obs.interpreter_details
 
         obs = _run_cmd_action(
             runtime, f'cat {sandbox_dir}/test_file.txt', keep_prompt=False
         )
         assert obs.exit_code == 0
-        assert 'root@' not in obs.content
+        assert 'root@' not in obs.interpreter_details
     finally:
         _close_test_runtime(runtime)
 
diff --git a/tests/unit/test_observation_serialization.py b/tests/unit/test_observation_serialization.py
index 545df2f5f209..ae636ddf562b 100644
--- a/tests/unit/test_observation_serialization.py
+++ b/tests/unit/test_observation_serialization.py
@@ -52,6 +52,7 @@ def test_observation_event_props_serialization_deserialization():
             'command': 'ls -l',
             'command_id': 3,
             'hidden': False,
+            'interpreter_details': '',
         },
         'content': 'foo.txt',
     }
@@ -66,6 +67,7 @@ def test_command_output_observation_serialization_deserialization():
             'command': 'ls -l',
             'command_id': 3,
             'hidden': False,
+            'interpreter_details': '',
         },
         'message': 'Command `ls -l` executed with exit code 0.',
         'content': 'foo.txt',