Horse mounted outside southern port (5)
I believe the answer is:
basra
'port' is the definition.
(I have seen 'Iraqi port ' mean 'basra' so perhaps 'port' could also mean 'basra')
'horse mounted outside southern' is the wordplay.
'horse' becomes 'arab' (Arab is an example).
'mounted' says the letters should be written in reverse.
'outside' indicates putting letters inside.
'southern' becomes 's' (abbreviation).
'arab' back-to-front is 'bara'.
'bara' enclosing 's' is 'BASRA'.
(Other definitions for basra that I've seen before include "Middle Eastern city" , "Iraqi town" , "South Iraqi oil port" , "Iraqi port on the Shatt-al-Arab waterway" , "Iraqi city; Arabs (anag.)" .)