I just did this one, I captured it, by the time I got the airports set up we were at peace. I sent a worker back and forth a few times with no luck. I airlifted all my offensive attackers away from lisbon back to one of my other cities (not casablanca). Then when I airlifted a worker from casablanca to lisbon, the achievement popped. There must be something with the other units being in/around the cities that was causing it not to flag, because as soon as I moved them, it worked.
How to get this achievement easily:
Settler difficulty, 3 players, skirmish map, information age, quick speed, no barbarians.
Found your first city anywhere and get an armory, and start building some paratroopers. Have your other guys scout around, and found your second on top of some aluminum. Third city goes anywhere. Start building 6 bombers, and some rocket artillery.
You can take out Portugal's main city in about 10-20 turns this way super easily. Just be sure you empty the area to get the achievement to work.