Keep your eyes peeled, say (7)

I believe the answer is:

observe

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'say' is the definition.
(observing is a kind of saying)

I don't understand the rest of the clue.

(Other definitions for observe that I've seen before include "Keep - watch" , "Notice or make a remark" , "Watch closely" , "Obverse (anag.)" , "Espy" .)

I've seen this clue in The Sunday Times.

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