Alma 7:10 And behold, he shall be born of Mary, at Jerusalem which is the land of our forefathers, she being a virgin, a precious and chosen vessel, who shall be overshadowed and conceive by the power of the Holy Ghost, and bring forth a son, yea, even the Son of God.
‘Jesus was the son of Mary, a mortal woman. And he was the son of Elohim, the Eternal Father. He was not the son of the Holy Ghost, as some have supposed from the New Testament account (Matthew 1:18).’ (McConkie and Millet, Doctrinal Commentary on the Book of Mormon, vol. 3, p. 51)
Many who have sought to show that the Book of Mormon is a fraud have seized on this verse as evidence of an error by Joseph Smith as everybody knows that Jesus was born in Bethlehem and not Jerusalem. (Do they think that Joseph Smith didn’t know that Jesus was born in Bethlehem?)
Elder Parley P Pratt explained that the use of the name Jerusalem rather than Bethlehem was appropriate to the audience that Alma was addressing:
‘This you say, is a contradiction of his being born in Bethlehem, (a little place, six miles from Jerusalem,) but mark the local difference in the places where each was spoken. One prophet stands in the vicinity where the thing was fulfilled, and points out the exact location, (Bethlehem.) The other stands on the other side of the globe, from Jerusalem, and addresses a people who knew but little concerning the localities of the various towns and villages of Judea. The prophet speaks in general terms concerning a thing which should transpire in the land of Jerusalem, as they had a general idea of the great capital city and country, from whence they sprang, rather than a distinct idea of all its villages. This is in perfect accordance with all the circumstances under which they wrote, and a great proof in favour of the Book of Mormon; because an imposter, in forging a book, would have said Bethlehem; for every school boy knows, that Bethlehem is the place where the Lord was born’. (Parley P. Pratt, Mormonism Unveiled,  pp. 17-18.)
Commenting on verse 10, President Joseph Fielding Smith said:
“There is no conflict or contradiction in the Book of Mormon with any truth recorded in the Bible. A careful reading of what Alma said will show that he had no intention of declaring that Jesus would be born in Jerusalem. Alma knew better. So did Joseph Smith and those who were associated with him in the bringing forth of the Book of Mormon. Had Alma said, ‘born in Jerusalem, the city of our fathers, ’ it would have made all the difference in the world. Then we would have said he made an error. Alma made no mistake, and what he said is true.
“Dr. Hugh Nibley, in his course of study for the priesthood for 1957, An Approach to the Book of Mormon, in Lesson 8, page 85, has this to say on this point:
“‘. . . One of the favorite points of attack on the Book of Mormon has been the statement in Alma 7:10 that the Savior would be born “at Jerusalem which is the land of our forefathers.” Here Jerusalem is not the city “in the land of our forefathers,” it is the land. Christ was born in a village some six miles from the city of Jerusalem; it was not in the city, but it was in what we now know the ancients themselves designated as “the land of Jerusalem.” Such a neat test of authenticity is not often found in ancient documents.’ . . .
“. . . [Alma] did not say that the Lord would be born in Jerusalem. The preposition ‘at’ has several meanings. The Standard Dictionary lists the following:
“‘Of a point in space; on; upon; close to; by; near; within. . . . When we think merely of the local or geographical point, we use at; when we think of inclusive space, we employ in.’
“Alma was thinking of a geographical point, therefore he spoke properly according to the usage of language even in our own day when he said, ‘at Jerusalem, the land of our forefathers, ’ Jerusalem being the central point of the land of their fathers”
(Answers to Gospel Questions, 1:174–75).