I can usually clear jungle but it seems that when I try clearing jungle in another civ's territory it won't work :( Is this how it's supposed to work or this a bug?

All worker functions should be able to work regardless of the owner of the territory.

I was at war with them if that makes any difference. :confused:

Why would you want to help them while at war? I think its impossible to improve an enemies territory. I'll try it out.

Some terraforming functions are not available in other than your own territory. It was introduced at some point to fix an exploit where players would plant forests in neighboring civs territory.