I believe he might be referring to a source named
The Teaching of Jacob the Newly Baptized. It doesn't state that Muhammad conquered Jerusalem, just implies that he was present with the Arabs as the invasion of Palestine commenced.
Might as well copy the relevant parts of the text here for anyone interested - it is the earliest recorded reference (July 634) to Muhammad (though he is not actually named), dated two years after his death according to the Islamic tradition:
Justus answered and said, “Indeed you speak the truth, and this is the great salvation: to believe in Christ. For I confess to you, master Jacob, the complete truth. My brother Abraham wrote to me that a false prophet has appeared. Abraham writes, “When [Sergius] the candidatus was killed by the Saracens, I was in Caesarea, and I went by ship to Sykamina. And they were saying, ‘The candidatus has been killed,’ and we Jews were overjoyed. And they were saying, ‘A prophet has appeared, coming with the Saracens, and he is preaching the arrival of the anointed one who is to come, the Messiah.’ And when I arrived in Sykamina, I visited an old man who was learned in the Scriptures, and I said to him, ‘What can you tell me about the prophet who has appeared with the Saracens?’ And he said to me, groaning loudly, ‘He is false, for prophets do not come with a sword and a war- chariot. Truly the things set in motion today are deeds of anarchy, and I fear that somehow the first Christ that came, whom the Christians worship, was the one sent by God, and instead of him we will receive the Antichrist. Truly, Isaiah said that we Jews will have a deceived and hardened heart until the entire earth is destroyed. But go, master Abraham, and find out about this prophet who has appeared.’ And when I, Abraham, investigated thoroughly, I heard from those who had met him that one will find no truth in the so-called prophet, only the shedding of human blood. In fact, he says that he has the keys of paradise, which is impossible.” These things my brother Abraham has written from the East."
From this book -
https://www.ucpress.edu/book/9780520299610/a-prophet-has-appeared