Palace in cathedral city diocese (6)
I believe the answer is:
elysee
'palace' is the definition.
(I've seen this before)
'cathedral city diocese' is the wordplay.
'cathedral city' becomes 'ely' (English city with a cathedral).
'diocese' becomes 'see' (I've seen this in another clue).
'ely'+'see'='ELYSEE'
'in' acts as a link.
(Other definitions for elysee that I've seen before include "French President's palace" , "Parisian palace" , "in which Napoleon once lived?" , "Official palace in Paris" , "French leader's palace" .)