I'd suggest using the stopPropagation() method as shown in the modified fiddle:

Fiddle

$('body').click(function() {
    $(".popup").hide();
});

$('.popup').click(function(e) {
    e.stopPropagation();
});

That way you can hide the popup when you click on the body, without having to add an extra if, and when you click on the popup, the event…