This is a common fault on this model. The switch is part of the valve body INSIDE the gearbox. An EXPENSIVE job for a simple problem. There could be a wiring work around but I don't know how legal or safe that would be. Best option is to suffer the pain and pay to get it fixed.
Reverse switch is located on the transmission usually it has two wires,bridge the wires together if reverse lights come on you have a faulty switch
SOURCE: I think I have a
if memory serves me it screws into the trans case on the drivers side above the rear corner of the trans pan
SOURCE: Where is Neutral safty sensor switch located on Grand Cherokee
OK then the switch is part of the gear selector switch on the side of the trans where the shift linkage hooks up. here is a picture and part number.
ACDELCO Part # C2241 $233.89
SOURCE: 1998 Jeep Cherokee Sport. The neutral safety
The nutral safty swiths is to ensure the vehicle doens't crank in any gear but park. Just make sure it is not out of adjustment
SOURCE: 2004 Jeep Grand Chrokee Neutral Safety Switch Location
The switch is on the transmission..It is usually a dealer item but you can get one from Rockauto.com for about 1/4 of what the dealers charge.
SOURCE: where is neutral safety switch 95 jeep cherokee
Review Section-21-Transmission-Transfer-Cases-95XJ21 in there you can find all infomation about Neutral Switch (page 183 and next).
I hope help you with this. Good luck (remember rated this).
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