Lie by river accommodating alien Yankee craft (8)
I believe the answer is:
basketry
'craft' is the definition.
(basketry is a kind of craft)
'lie by river accommodating alien yankee' is the wordplay.
'lie' becomes 'bask' (to bask in something is to lie in it).
'by river' becomes 'r' (I am not sure about the 'by' bit.).
'accommodating' is an insertion indicator.
'alien' becomes 'et' (extra terrestrial).
'yankee' becomes 'Y' (phonetic alphabet: alpha, bravo, charlie etc.).
'bask'+'r'='baskr'
'baskr' going around 'et' is 'basketr'.
'basketr'+'y'='BASKETRY'
(Other definitions for basketry that I've seen before include "Cane-weaving craft" , "Art of weaving containers" , "craft hobby" .)