The most common and most likely answer to this crossword clue is the 7 letter word VATICAN
I've seen this crossword clue in The Times
V
A
T
I
C
A
N
More clues leading to the result VATICAN
- Vessel I’m able to show palace in Rome
- Palace the holders, having overcome Ipswich originally
- Religious body, one separating two vessels
- Putting bible back, I can't suspect authority of church
- Inspired by a new religious centre
- . See the author loading two containers
- From vessel I’m able to see inside Rome
- Important see, the setter fills containers
- Rome’s authority imposes tax on international tin
- Using tax, I preserve palace in European city
Buddy explains!

The straight part
We know that "Palace" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case palace = vatican.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.