Combinging a PHP script with another PHP file, jQuery and HTML

I have a PHP search suggestion script which uses a MySQL database as its' back-end and jQuery to push the content to the search box page. The PHP is currently in suggest.php and my search box is on index.php. I want to put the PHP script from suggest.php into the index.php script code but it doesn't seem to work. Why could this be?

Here is my code for suggest.php:

<?php

$database=new mysqli('localhost','username','password','database');

if(isset($_POST['query'])){
$query=$database->real_escape_string($_POST['query']);
            if(strlen($query)>0){
                $suggestions=$database->query("SELECT name, value FROM search WHERE name LIKE '%".$query."%' ORDER BY value DESC LIMIT 5");
                if($suggestions){
                    echo '<ul id="suggest">';
                    while($result=$suggestions->fetch_object()){
                        echo '<li>'.$result->name.'</li>';                      
                    }
                    echo '</ul>';
                }
            }
        }
?>

Here is my code for index.php:

<script type='text/javascript' src='js/jquery.js'></script>
<script type='text/javascript'>function lookup(a){if (a.length==0){$("#suggestions").hide();} else {$.post("suggest.php",{query:"" + a + ""},function (b){$("#suggestions").html(b).show();})}};</script>

<form id='search' method='post'>
<input type='text' id='query' onkeyup='lookup(this.value);'>
<div id='suggestions'></div>
</form>