Chase him down and have your wrist blade enabled. Run up that and another short cutscene will show your target on top of another building.
Hold down R1+x and run across the chandeliers and the ladder will be to the right. Then a short cutscene will show your target running away and up another ladder. Instead, turn around and run up the ladder to get to the 2nd floor. When you go to Jerusalem and do the assassination with the guards surrounding you, don't even try to fight them off. Tip for Assassins Creed for Playstation 3:
