Outside terrace restaurant next to Mirador de San Nicolas.
You will certainly visit Mirador de San Nicolas when you visit Granada which has amazing views of the Alhambra. If it is a sunny day and it is around midday this is an excellent place to eat or just have a coffee.
The minibus C1 and C2 comes up to Mirador de San Nicolas every 15 minutes or so. This restaurant is in the Albayzin which is a neighbourhood opposite the Alhambra with the typical whitewashed houses and geranium filled balconies.