diff --git a/common/sessionParsing.ts b/common/sessionParsing.ts
index a29456d98d..3ba94dc29d 100644
--- a/common/sessionParsing.ts
+++ b/common/sessionParsing.ts
@@ -237,6 +237,34 @@ export function parseToolCallDetails(
 				} : undefined
 			};
 		}
+	} else if (name === 'str_replace') {
+		const filePath = args.path;
+		const fileLabel = filePath && toFileLabel(filePath);
+
+		return {
+			toolName: 'Edit',
+			invocationMessage: fileLabel ? `Edit [](${fileLabel})` : `Edit ${filePath}`,
+			pastTenseMessage: fileLabel ? `Edit [](${fileLabel})` : `Edit ${filePath}`,
+			toolSpecificData: fileLabel ? {
+				command: 'str_replace',
+				filePath: filePath,
+				fileLabel: fileLabel,
+			} : undefined
+		}
+	} else if (name === 'create') {
+		const filePath = args.path;
+		const fileLabel = filePath && toFileLabel(filePath);
+
+		return {
+			toolName: 'Create',
+			invocationMessage: fileLabel ? `Create [](${fileLabel})` : `Create File ${filePath}`,
+			pastTenseMessage: fileLabel ? `Create [](${fileLabel})` : `Create File ${filePath}`,
+			toolSpecificData: fileLabel ? {
+				command: 'create',
+				filePath: filePath,
+				fileLabel: fileLabel,
+			} : undefined
+		}
 	} else if (name === 'view') {
 		const filePath = args.path;
 		const fileLabel = filePath && toFileLabel(filePath);
diff --git a/src/github/copilotRemoteAgent.ts b/src/github/copilotRemoteAgent.ts
index 2190f75999..280bfcfb24 100644
--- a/src/github/copilotRemoteAgent.ts
+++ b/src/github/copilotRemoteAgent.ts
@@ -1082,8 +1082,8 @@ export class CopilotRemoteAgentManager extends Disposable {
 					const delta = choice.delta;
 
 					if (delta.role === 'assistant') {
-						// Handle special case for run_custom_setup_step
-						if (choice.finish_reason === 'tool_calls' && delta.tool_calls?.length && delta.tool_calls[0].function.name === 'run_custom_setup_step') {
+						// Handle special case for run_custom_setup_step/run_setup
+						if (choice.finish_reason === 'tool_calls' && delta.tool_calls?.length && (delta.tool_calls[0].function.name === 'run_custom_setup_step' || delta.tool_calls[0].function.name === 'run_setup')) {
 							const toolCall = delta.tool_calls[0];
 							let args: any = {};
 							try {