The Ducal Palace is a palace in North Baldur's Gate that is used for council meetings and where some noblemen sleep. The palace is heavily guarded by the Flaming Fist and will demand proof off everyone who enters that they have a right to do so.
In Chapter 7 of the game Baldur's Gate, after stealing invitations to the council meeting off Slythe and Krystin, the player needs to go to the Ducal Palace and first show their invites to the Flaming Fist Guard Bill at the entrance, and then again to a Flaming Fist Mercenary inside. After showing the invites, the player will listen and watch the meeting until eventually Sarevok (who the dukes are prepared to crown 'Grand Duke') spots the player and the six noblemen involved in the meeting will transform into doppelgangers and attack the player and his/her party. Once the doppelgangers have been killed, the player will then frame Sarevok as a scoundrel but must have Sarevok's dairy to prove that this is the truth, otherwise Duke Belt will immediately kill the player. Sarevok will be transported out of the palace into the Undercity by Winski Perorate and the player must follow him to finally complete the game and kill the person who killed Gorion.