Palace watch City taking the lead (6)
I believe the answer is:
elysee
'palace' is the definition.
(I've seen this before)
'watch city taking the lead' is the wordplay.
'watch' becomes 'see' (see can mean to view or watch).
'city' becomes 'ely' (Ely is a city in Cambridgeshire).
'taking the lead' means one lot of letters go next to another.
'see' after 'ely' is 'ELYSEE'.
(Other definitions for elysee that I've seen before include "- Palace, French presidential residence" , "Parisian palace" , "French leader's palace" , "Official palace in Paris" , "Palace occupied by the French president" .)