City set to absorb one valley after reflection (3,4)
I believe the answer is:
tel aviv
'city' is the definition.
(Israeli city)
'set to absorb one valley after reflection' is the wordplay.
'set' becomes 'TV' (TV set).
'to absorb' indicates putting letters inside.
'one' becomes 'i' (Roman numeral).
'valley' becomes 'vale' (synonyms).
'after reflection' says the letters should be written backwards.
'i'+'vale'='ivale'
'ivale' reversed gives 'elavi'.
'tv' going around 'elavi' is 'TEL AVIV'.
(Other definitions for tel aviv that I've seen before include "city on the Mediterranean coast" , "Israeli city on the Mediterranean" , "Evil Vat imposed on Israeli city" , "Second largest city of Israel" , "Financial centre of Israel" .)