The Washington Post today carried this article detailing an archeological dig that might have found King David's palace:

Down the slope from the Old City's Dung Gate, rows of thick stone walls, shards of pottery and other remains of an expansive ancient building are being exhumed from a dusty pit.

The site is on a narrow terrace at the edge of the Kidron Valley, which sheers away from the Old City walls, in a cliffside area the Bible describes as the seat of the kings of ancient Israel.

What is taking shape in the rocky earth, marked by centuries of conquest and development, is as contested as the neighborhood of Arabs and Jews encircling the excavation. But the Israeli archaeologist Eilat Mazar believes the evidence she has uncovered during months of excavation and biblical comparison points to an extraordinary discovery.

What has actually been discovered, mainly some walls and pottery sherds, reads to me like pretty slim evidence, but it's good to see there are still parts of the ancient city still available for digging. As with all thriving modern cities with roots deep in the past, the vast majority of Jerusalem's archeological potential is buried under people's houses and businesses.