It should be fine as long as the cat has someplace 'safe' to go that Diezel can't get to her. Our older Yorkie learned real fast that there are a few pieces of furniture that the 'kids' can't get on and that he is safe from them up there.
One suggestion about trying to get Diezel to like her better and maybe even start to play with her, is for you to be playing with her and when Diezel comes to investigate encourage him to join in. If he doesn't join in, sort of ignore him, his Yorkie curiosity will get the better of him and he'll want to be included. Have some treats with you and reward any good advances that Diezel makes. Lots of praise, and treats will go a long way in getting him to understand what you want.
