The most common and most likely answer to this crossword clue is the 4 letter word GAZE
G
A
Z
E
More clues leading to the result GAZE
Buddy explains!

The straight part
We know that "Observe" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case observe = gaze.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does GAZE mean?
GAZE noun- A fixed look; a look of eagerness, wonder, or admiration; a continued look of attention.
- The object gazed on.
- In Lacanian psychoanalysis, the relationship of the subject with the desire to look and awareness that one can be viewed.
- To stare intently or earnestly.
- To stare at.