Upon first meeting the disguised Princess Jasmine in Agrabah’s marketplace, Aladdin falls in love with her and goes on a small adventure. Aladdin’s imprisoned by the guards by order of Jafar, and when Jasmine orders Jafar to set him free, she’s told that he’s already been executed for kidnapping the princess.
Jafar’s actual plan, of course, is to use Aladdin to retrieve the lamp for him from the Cave of Wonders. Aladdin (with no little help from Abu) manages to keep the lamp for himself and summon the Genie to make him a prince. He disguises himself as Prince Ali, even to Jasmine, who’d previously met him.
When she finds out who he really is, she’s pissed off at him for lying to her. Aladdin compounds the lie by saying that he really is a prince.
Why did Jasmine never say, “I thought you were dead”? As far as she knew, he’d been executed!