I have worked on hiring committees and I can tell you that one and two-part application letters do not form part of official terminology. I believe that your employer may simply expect that you submit a cover letter, as well as the application letter itself, which should include a clear statement of intent and indicate why you are an ideal candidate to fill the opening. Your cover letter can be much shorter and should simply indicate your contact information, the required documents that you are attaching and confirm your interest in the job. You best option, however, is to contact the employer and ask for clarification, in order to make sure that you are providing precisely what he/she requires.
