Of course it can. It makes no difference that originally it was a neutral territory. Its current status is a territory of the United States and therefore, with an IPC value of two,it can be a location where a minor industrial complex can be placed.
combat resolution
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Is one die rolled for each one to one soldier contact?
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also is one soldier versus one soldier plus artillery also One die?
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Each unit with a combat value would get one die. One attacking infantry would roll one die(scoring a hit on a “1”) and the defending infantry+artillery rolls 2 dice(scoring a hit for each die showing “1” or “2”). This continues each round until combat is resolved or attacker retreats