Old city's ceremony -- bet it is occasionally ignored (7)
I believe the answer is:
pompeii
'old city's' is the definition.
(I've seen this before)
'ceremony bet it is occasionally ignored' is the wordplay.
'ceremony' becomes 'pomp' (I've seen this before).
'occasionally ignored' means one should take alternating letters (ignore occasional letters and keep the rest).
'bet'+'it'+'is'='betitis'
The alternate letters of 'betitis' are 'eii'.
'pomp'+'eii'='POMPEII'
(Other definitions for pompeii that I've seen before include "Ancient Italian city" , "Town buried by Vesuvius 1st century a.d." , "Vesuvius-buried town" , "Roman town buried by Vesuvius" , "Buried Roman city" .)