Here the word "their" refers to the people of Judah. See how you translated similar words in [Jeremiah 29:14](../29/14.md). (See: [[rc://en/ta/man/jit/figs-explicit]])
Jerusalem is on the top of a hill, and the temple was built at the highest point in Jerusalem. Alternate translation: "May Yahweh bless those who live in Jerusalem with Yahweh, where his temple is" (See: [[rc://en/ta/man/jit/figs-apostrophe]] and [[rc://en/ta/man/jit/figs-metonymy]])