Allied squad exercised outside (6)
I believe the answer is:
united
'allied' is the definition.
(similar in meaning)
'squad exercised outside' is the wordplay.
'squad' becomes 'unit' (both can mean a group of soldiers).
'outside' suggests removing the centre.
'exercised' with its middle taken out is 'ed'.
'unit'+'ed'='UNITED'
(Other definitions for united that I've seen before include "Joined into a single entity" , "Joined or combined" , "Married pair, are, like Man U!" , "Merged into one" , "Mark -, Russian-born US abstract painter" .)