Changing an image's ALT value with jQuery

I have a modal form that changes the caption of a photo (paragraph under the image) and I am also trying to change the image's ALT attribute but cannot seem to.

Here is the jQuery I am trying to make work

$(".edit").click(function() {
                var parent = $(this).parents('.item');
                var caption = $(parent).find('.labelCaption').html();
                $("#photoCaption").val(caption);
                $("#editCaptionDialog").dialog({
                        width: 450,
                        bgiframe: true,
                        resizable: false,
                        modal: true,
                        title: 'Edit Caption',
                        overlay: {
                            backgroundColor: '#000',
                            opacity: 0.5
                        },
                        buttons: {
                            'Edit': function() {
                                var newCaption = $("#photoCaption").val();
                                $(parent).find(".labelCaption").html(newCaption);
                                $(parent).find('img').attr('alt', newCaption);
                            }
                        }
                });
                return false;
            });

And the HTML

<li class="item ui-corner-all" id="photo<? echo $images['id'];?>">
                        <div>
                            <a href="http://tapp-essexvfd.org/gallery/photos/<?php echo $images['filename'];?>.jpg" class="lightbox" title="<?php echo $images['caption'];?>">
                            <img src="http://tapp-essexvfd.org/gallery/photos/thumbs/<?php echo $images['filename'];?>.jpg" alt="<?php echo $images['caption'];?>" class="photo ui-corner-all"/></a><br/>
                            <p><span class="labelCaption"><?php echo $images['caption'];?> </span></p>
                            <p><a href="edit_photo.php?filename=<?php echo $images['filename'];?>" class="button2 edit ui-state-default ui-corner-all">Edit</a></p>
                        </div>
                    </li>

The caption is changing like it should.

Thanks

UPDATE

Here is the code for editCaption

<div id="editCaptionDialog" style="display: none;">
                        <p><strong>Caption:</strong> <input type="text" name="photoCaption" id="photoCaption"/></p>
                </div>

Are you sure you're not trying to change the title attribute?, alt attribute cannot be seen without disabling images.

This isn't working because, well 2 reasons, look at Ben's answer to see if this is the behavior you want in the first place. Currently you're cloning the jQuery object, this line:

var parent = $(this).parents('.item');

Already returns a jQuery object, so by doing $(parent) you're cloning it. From the docs:

jQuery(jQuery object) - jQuery object - An existing jQuery object to clone.

To fix it, instead do this:

parent.find(".labelCaption").html(newCaption);
parent.find('img').attr('alt', newCaption);

Also, I'd change $(this).parents('.item'); to $(this).closest('.item'); to be a bit safer.