Surpass American state and European island (5)

I believe the answer is:

capri

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'european island' is the definition.
'Capri' can be an answer for 'island' (Italian island). I'm not certain of the 'european' bit.

'surpass american state' is the wordplay.
'surpass' becomes 'cap' (I've seen this before).
'american state' becomes 'RI' (abbreviation for Rhode Island).
'cap'+'ri'='CAPRI'

'and' acts as a link.

Can you help me to learn more?

(Other definitions for capri that I've seen before include "Old Ford model - Italian island" , "I carp about the island" , "Island near Naples" , "Italian resort island, once home to Gracie Fields" , "Island off Italy" .)

I've seen this clue in The Times.

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