Live on both sides in German city (6)
I believe the answer is:
berlin
'german city' is the definition.
(Berlin is the capital of Germany)
'live on both sides in' is the wordplay.
'live' becomes 'be' (synonyms).
'on' says to put letters next to each other.
'both sides' becomes 'RL' (abbreviation for left and right).
'be'+'rl'+'in'='BERLIN'
(Other definitions for berlin that I've seen before include "Capital of Germany" , "Irving . . . . . . , great American song-writer" , "A once-divided city" , "German city" , "City once divided by wall" .)