Gemstone Roman Catholic observed in the Heavenly City? (6)
I believe the answer is:
zircon
'gemstone' is the definition.
(zircon is a kind of gemstone)
'roman catholic observed in the heavenly city?' is the wordplay.
'roman catholic' becomes 'rc' ('r.c.' can be a synonym of 'roman catholic').
'observed in' means one lot of letters goes inside another.
'the heavenly city?' becomes 'zion'.
'rc' put inside 'zion' is 'ZIRCON'.
(Other definitions for zircon that I've seen before include "Bluish-white gem cut from translucent mineral" , "'Hard mineral, semi-precious gemstone (6)'" , "jewel" , "Crystal-like semi-precious stone" , "Gemstone, maybe jacinth" .)