Likely that it (or, specifically, East Jerusalem, West Jerusalem was Israeli both under the partition and the 1949 Armistice Agreement) is part of the territory Israel occupied after 1967 that wasn't Israel, despite later being decalred as annexed, and is generally not viewed internationally as Israeli territory.
Likely, but since as you say West Jerusalem is Israeli, and the government of Israel is in West Jerusalem on a practical basis, calling it a Palestinian city is both wrong, and making a point that I think is worth stating explicitly.
