Australian city set within a river (8)
I believe the answer is:
adelaide
'australian city' is the definition.
(I've seen this in another clue)
'set within a river' is the wordplay.
'set' becomes 'laid' (synonyms).
'within' is an insertion indicator.
'river' becomes 'Dee' (River Dee).
'a'+'dee'='adee'
'laid' inserted into 'adee' is 'ADELAIDE'.
(Other definitions for adelaide that I've seen before include "19th century queen" , "Queen to William IV - setting for many an 6 test" , "Woman" , "Australian capital" , "Antipodean city" .)