"הכנסייה נמצאת במרכז העיר."
Translation:The church is in the city center.
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I don't think it should be accepted. There are at least two issues with your translation. First, since מרכז העיר is definite, you'd need to say "the center of the town", or even better "the town center". Second issue, עיר is better translated as "city" and not "town", which is how this course consistently translates this word.