Armed conflict I observed in part of London (6)
I believe the answer is:
action
'armed conflict' is the definition.
(I've seen this before)
'i observed in part of london' is the wordplay.
'observed in' is an insertion indicator.
'part of london' becomes 'acton' (I've seen this before).
'i' put into 'acton' is 'ACTION'.
(Other definitions for action that I've seen before include "It is said to speak louder than words" , "Law suit" , "Lawsuit; armed conflict" , "Legal proceeding brought by one party against another" , "Director's call" .)