My 95 GC does the same thing.
The problem with mine and I suspect the same for yours is the Viscous Coupling in the transfer case.
The Viscous Coupling transfers power/torque to the front axle, this coupling takes the place of the third differential in a conventional Jeep four-wheel drive system.
Here's why it's doing what it's doing.
When both of our Jeeps were new this Viscous Coupling worked as designed and it worked well. The Viscous Coupling is filled with a thick silicone fluid, the metal blades inside the coupling want to spin freely when your tires lose traction, the viscous fluid resists this rotation thus transferring power/torque to the wheels with traction.
When this viscous fluid degrades from high heat it gets thicker, it's not allowing the front wheels to spin at a different speed (faster in relation to the rear when turning sharply) this results in the jolting, jumping or jerking when turning sharply into a parking space.
When my Jeep is cold from parking overnight and I drive to the local grocery store the jerking usually don't occur because the coupling fluid has not warmed up yet, but after some freeway driving the jerking will show up.
Will it hurt the Jeep to drive it like that? Yes, over time it will, the transfer case chain is taking most of the abuse.
Is this thing expensive to repair/replace? Very, when I asked the dealership parts guy 2 years ago on price & availability he told me it was over $900.00 just for that Viscous Coupling! Going the used part route isn't an option because these coupling all degrade to the same bound-up state.
The most logical way to go if you are going to keep this Jeep is to find a part time/full-time transfer-case from the same year Jeep, these transfer-cases have a standard differential instead of the viscous coupling. The transfer-case shift indicator will have to be changed and a wire will have to be plugged into a different port behind your Vehicle Information Center to get everything working correctly.
Why haven't I fixed my Jeep yet? Because I'm cheap and don't have the funds.
This is what I do to minimize the jerking:
(1) Make sure your tires are all the same size (diameter wise) and inflated to the same pressure, this is key because if they're not they'll spin at different rates and heat that coupling up even more making the problem worse.
(2) Try to avoid tight parking spots after a long drive, find a spot where you can pull in and drive out, this will save wear & tear on that transfer-case chain.
The above two tips have made the problem bearable, it's going on 7 years now for my Jeep.
I've had decent luck with my Jeep, good luck with yours.
Bill
My 98 Grand Cherokee has Jeep's version of all wheel drive for that year. When the steering wheel is turned at or near all the way left or right, the car hesitates, bucks and jolts very badly and sometimes makes a kind of knock in the front end. Its same for forward & reverse. My mechanic has replaced what he calls boots around the left & right steering joints somewhere, which he says are there to prevent corrosion. Does not help the problem at all. Trying to get into a parking spot is a nightmare. Any ideas?

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