We propose a computationally attractive transform-domain gradient-with-projection-on-bounding-ellipsoid (G-PrOBE) algorithm. The main idea in the proposed frequency-domain G-PrOBE algorithm is that the system parameters are computed by projecting the gradient estimate onto a set that is updated using a priori information from the instantaneous error magnitude. Experimental results demonstrate that the transform-domain G-PrOBE algorithm is more robust towards burst errors and tends to exhibit smaller parameter variance relative to gradient-type algorithms especially under low signal excitation