Better:

  Delete xyz.jpg?
  --------------------------
  The file 'xyz.jpg' will be
  permanently deleted.
  --------------------------
          [ Delete xyz.jpg ]
            [ Keep xyz.jpg ]

Action buttons sometimes need to be single verbs for the sake of brevity. A verb-noun pair is much more legible than a standalone verb. Self-explanatory buttons are usually preferable to buttons that depend on explanatory text.