One palace in two dioceses (6)
I believe the answer is:
elysee
'one palace' is the definition.
(I've seen this before)
'two dioceses' is the wordplay.
'two dioceses' means two replacements for 'diocese'.
'diocese' becomes 'ely' (I've seen this before).
'diocese' becomes 'see' (both can mean a cathedral area).
'ely'+'see'='ELYSEE'
'in' acts as a link.
(Other definitions for elysee that I've seen before include "French leader's palace" , "Palace occupied by the French president" , "Parisian palace" , "- Palace, French presidential residence" , "Official residence of the French president" .)