It is likely Rome, but there is a possibility that the writer is using the image to refer to apostasy/traitors who persecute the Church in general, and may include apostate Jerusalem. We understand this from the earliest references to it in Christian history.
Since the Apocalypse of John was very late to the inclusion into the canon of the New Testament--practically unheard of in Christendom itself until the canon was officially closed by Athansius in 367 CE --the first commentary on it was not written until around 290 CE by Victorinus of Pettau, a bishop who was matryred by Diocletian.
It was treated as, well, the title suggests--an "apocalypse" and not a "forecast." It talks about the visions being allusions to persecutions and intrigues already suffered by the church at the time of its composition.
To further "blow the minds" of Jehovah's Witnesses, it makes reference to the Catholic teaching of the "restored" earth. Yes, the Catholics (like the Jews) have always talked about "Paradise restored." For instance, every Sunday at Mass they recite the words "I believe in...the resurrection of the body" (Apostles' Creed) or "I look forward to the resurrection of the dead and the life of the world to come." (Nicene Creed) Both this commentary from the 3rd century and the current Catechism of the Catholic Church talk about the "paradise" to come where the physical reuniting of soul and body will take place in a recreated universe in reference to the last chapters of Revelation.--See CCC 1046, 1047.
I recall how many Jehovah's Witness who became converts to the Watchtower religion simply on the "paradise" claim that "they showed me this from the Bible, which was so clearly a Christian teaching, so they must be the only true religion because they were the only ones teaching this," yet it was far from being a unique teaching. Like everything else Watchtower, it was stolen and repackaged.
I remember hearing from Bart Ehrman once (though he was talking from his experience with Fundamentalism and his disappointment from it) how he was startled to learn from reading Victorinus and the Church Fathers on Revelation and realizing that they did not believe it had anything to do with the future, like he had always been taught, but the past--except for those very last chapters--and then startled to hear about some "restored paradise" instead of heaven.
This view, of Victorinus and the Church Fathers, is called by academics the preterist view. It maintains that much of the book concerns the events within the lifetime of the author and his readers.
There are other views that developed afterwards:
- Critical view: A current view--a struggle between Church and State withing the 1st century.
- Idealist view: The never-ending struggles between good and evil in every Christian's life.
- Historicist view: Panorama of the Church's life as it marches through history from beginning to the end.
- Futurist view: The one held by the Watchtower (and some others) that the book is a forecast of events.
The understanding of an apocalypse is not meant to be "set in stone," so to speak--though it is not a prophetic forecast. Jewish writers hoped future readers could get encouragement from it when they faced difficult times as well since the main thrust of an apocalypse was that justice would always prevail.
This does not mean the writers knew that the details of their written visions were specific future forecasts of events. It was against both the Mosaic Law and Christian teaching to try to foretell the future or engage in divination. A writer of an apocalype was not necessarily the same as a prophet or a seer, and Christians often confuse the roles and the genres.