The city can be kept a secondary capital,but the capital should be in Egypt.Alternatively,the de jure capital can remain in Jerusalem,but since the de facto capital is basically where the king is,he can just stay in Egypt most of the time.It's much safer.True but Jerusalem is still the Holy city. I think if we see another Kingdom of Acre type scenario then yes chances are Alexandria or Cairo will become the seat of the King. But, if we're talking about Jerusalem keeping its pre Saladin borders, then things get difficult.