OpenSSH display error

[Sergio Brandano <sb@dcs.qmw.ac.uk>]

 Hi,

 I get this message when using OpenSSH (DebianPPC pkg):

   --> ssh -f alice xterm
   sb@alice.dcs.qmw.ac.uk's password: 
   <sb@alice> [~] 
   --> xterm Xt error: Can't open display: 

 The funny thing is that X11Forwarding is turned on in both
 /etc/ssh/sshd_config and /etc/ssh/ssh_config.

 How do I fix this?

 Thank you.
 Sergio