City lights are small (i think 10 watt) bulbs that mount inside of the housing near the H-4's, and go on when you put on the parking lights and head lights. On original european cars, these were the "running lights" ....on EU cars, the corner ambers are used only for directionals, and do not go on when you put the parking/running lights on. On an EU car, the blinkers are always in the on-off mode when blinking, same during day and night (with headlights on)

On a US car, the corner ambers are used as running lights. when the directionals are used, the blinkers operate in the "bright-dim" mode, as compared to the EU "on-off" mode.

I put european headlights on my 85 300 D, used the original US directionals, and wired the city lights to go on with the corner "running lights"

I hope your head lights have socket connectors as the OE connectors may not fit the new lamps. This is because the US connectors do not have a slot for the wire to the city lights.

Generally, EU headlights also come with EU corner directionals, and installation requires that you move the "running light" wire from the corner lamps to the head lamp city lights (in such case corner lamps will only operate as on-off blinkers, and not as running lights) If you want corners to operate in US mode (running lights and bright-dim blinkers), keep your original corner lamps, and run an extra wire from the running light terminal in the corner lamp to the city light terminal in the headlamp. Then when you turn on your running lights, both the corner amber and the white city light will be illuminated.

The other function of the city light is in case a headlight goes out, an oncoming driver will still see a dimly lit lamp from the city light...remember, on a EU car, amber lamps are not used for running lights, so this city light feature is a real safety feature on an EU car. Otherwise, with one headlight out, an oncoming driver would see only one lit headlight, and would not know which side of this light the car is at.