I don't think the word "standing" is really necessary here, so I'll explain the difference without it. "It's a church at the Palazza." We need to know what "it" is. For example, "Look for the Santa Maria. It's a church at the Palazza." "There's a church at the Palazza." This means a church can be found at the Palazza. We don't know its name at the moment. We use "there is/there are" to mean something exists.

Did you mean to write 'standing'? And is Palaza the name of a place? The nearest actual word to that is Palazza, which I think is Italian for palace.

The first sentence is like you are talking about the church, for example: do you know the old buildind at the PALAZA? Yes, "it's" a church. In the second one you want to express what things you can fin at the PALAZA, example: What can I find at the PALAZA? Well, there's a huge monumet, there are lots of peolple, there's a church. I hope I can help you!