In a medium bowl, toss potatoes, onions, olive oil, salt and pepper together until well coated.
Place mixture in the center of a 24-by-12-inch piece of aluminum foil. Top with rosemary.
Bring opposite edges of foil together and seal tightly with a double fold. Fold over edges tightly. Leave room inside packet for heat to circulate.
Place packet on the grill rack over medium-hot coals. Grill for 30 minutes or until potatoes are tender.
Remove packet from grill. Carefully open packet. Discard rosemary.
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