diff -ur freeciv/server/settlers.c aiset2/server/settlers.c
--- freeciv/server/settlers.c	Mon Mar  6 23:08:41 2000
+++ aiset2/server/settlers.c	Fri Mar 10 02:11:44 2000
@@ -48,6 +48,7 @@
 
 static int is_already_assigned(struct unit *myunit, struct player *pplayer, 
 			       int x, int y);
+int adjacent_city_exists(int x, int y);
 
 /**************************************************************************
 ...
@@ -1043,7 +1044,8 @@
 	    && map_get_terrain(x, y) != T_OCEAN
 	    && (territory[x][y]&(1<<player_num))
 				/* pretty good, hope it's enough! -- Syela */
-            && (near < 8 || map_get_continent(x, y) != ucont)) {
+            && (near < 8 || map_get_continent(x, y) != ucont)
+	    && !adjacent_city_exists(x,y)) {
 
 	  /* potential target, calculate mv_cost: */
           if (ferryboat) {
@@ -1428,4 +1430,39 @@
     unit_list_iterate_end;
     pcity->ai.founder_want = want;
   }
+}
+
+int adjacent_city_exists(int x, int y) /*little local helper function*/
+{
+  if (map_get_city(x-1,y+2)) return 0;
+  if (map_get_city(x,  y+2)) return 0;
+  if (map_get_city(x+1,y+2)) return 0;
+
+  if (map_get_city(x-2,y+1)) return 0;
+  if (map_get_city(x-1,y+1)) return 0;
+  if (map_get_city(x,  y+1)) return 0;
+  if (map_get_city(x+1,y+1)) return 0;
+  if (map_get_city(x+2,y+1)) return 0;
+  if (map_get_city(x-2,y+1)) return 0;
+  if (map_get_city(x-2,y+1)) return 0;
+
+  if (map_get_city(x-2,y)) return 0;
+  if (map_get_city(x-1,y)) return 0;
+/*if (map_get_city(x,  y)) return 0; need to be able to ad to city*/
+  if (map_get_city(x+1,y)) return 0;
+  if (map_get_city(x+2,y)) return 0;
+
+  if (map_get_city(x-2,y-1)) return 0;
+  if (map_get_city(x-1,y-1)) return 0;
+  if (map_get_city(x,  y-1)) return 0;
+  if (map_get_city(x+1,y-1)) return 0;
+  if (map_get_city(x+2,y-1)) return 0;
+  if (map_get_city(x-2,y-1)) return 0;
+  if (map_get_city(x-2,y-1)) return 0;
+
+  if (map_get_city(x-1,y-2)) return 0;
+  if (map_get_city(x,  y-2)) return 0;
+  if (map_get_city(x+1,y-2)) return 0;
+
+  return 0;
 }