There can be little doubt that King David had a palace. The Bible tells us that Hiram of Tyre (who would later help King Solomon build the Temple) constructed the palace for David: “King Hiram of Tyre sent envoys to David, with cedar logs, carpenters and stonemasons; and they built a palace for David” (2 Samuel 5:11). The Biblical narrative, I submit, better explains the archaeology we have uncovered than any other hypothesis that has been put forward. Indeed, the archaeological remains square perfectly with the Biblical description that tells us David went down from there to the citadel.
http://www.bib-arch.org/e-features/king-davids-palace.asp