Country outlaw in Spanish city (7)
I believe the answer is:
lebanon
'country' is the definition.
(Lebanon is an example)
'outlaw in spanish city' is the wordplay.
'outlaw' becomes 'ban' (banning is a kind of outlawing).
'in' means one lot of letters goes inside another.
'spanish city' becomes 'leon' (I've seen this in other clues).
'ban' inserted inside 'leon' is 'LEBANON'.
(Other definitions for lebanon that I've seen before include "far from home here" , "Nab Noel in eastern Med. country" , "Its capital is Beirut" , "Republic on Mediterranean" , "Neighbour of Israel" .)