Fools seen in the French city (5)

I believe the answer is:
lhasa
'city' is the definition.
(Lhasa is an example)
'fools seen in the french' is the wordplay.
'fools' becomes 'has' (I can't justify this - if you can you should give a lot more credence to this answer).
'seen in' is an insertion indicator.
'the french' becomes 'la' (one of the French words for 'the').
'has' put inside 'la' is 'LHASA'.
Can you help me to learn more?
(Other definitions for lhasa that I've seen before include "Tibetan holy city" , "Luxembourg's a" , "The Forbidden City in Tibet" , "Asian capital" , "foreign capital" .)
