This is a container clue - one word or letter goes inside (is contained within) another word or set of letters.
Look for 'has invaded' as your container indicator. You need to find what 'Spain' represents in crossword terms (check international vehicle registration codes), then put it inside a word meaning 'sad'.
Answer: TRIESTE | 'Has invaded' indicates a container. Spain's international vehicle registration code is E, which goes inside TRISTE (Italian for 'sad'), giving you TRI-E-STE, the Italian port city of Trieste.