I believe the recommended way to do that is:

Terminal=True

http://standards.freedesktop.org/desktop-entry-spec/latest/ar01s05.html

It's also recommended to not put a full path for Icon, rather it can be
as easy as:

Icon=octave

As the full path and file extension are automatically found. And while
I'm being picky, I believe Application category is no longer needed in
Gnome.

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Menu Entry for Octave
https://bugs.launchpad.net/bugs/118286
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