make/g++ within emacs causes wierd unicode control characters

[Micha Feigin]

I am trying to compile from within emacs (using M-x compile which calls make -k)

In the output I get wierd characters (I think unicode characters):

main.cc: In function ג€˜int main(int, char**)ג€™:
main.cc:16: error: no matching function for call to 
ג€˜LaplaceMat<double>::LaplaceMat(int&)ג€™
LaplaceMat.hh:7: note: candidates are: LaplaceMat<double>::LaplaceMat()

The system is setup to use unicode (hebrew).

Any ideas on how to fix this?