I would, when heard and observed (4)
I believe the answer is:
eyed
'observed' is the definition.
(I've seen this in another clue)
'i would when heard' is the wordplay.
'i would' becomes 'I'd'.
'when heard' shows a homophone (sound like).
'id' is a homophone of 'EYED'.
'and' acts as a link.
(Other definitions for eyed that I've seen before include "Ogled" , "Watched warily" , "Watched, looked at" , "examined" , "Spotted" .)