Observe about half an inch of water (5)
I believe the answer is:
seine
'water' is the definition.
(Seine is an example)
'observe about half an inch' is the wordplay.
'observe' becomes 'see' (I've seen this before).
'about' is an insertion indicator.
'half' means to take half the letters.
'inch' with half the letters taken is 'in'.
'see' going around 'in' is 'SEINE'.
'of' is the link.
(Other definitions for seine that I've seen before include "Second longest river in France" , "French river -- type of fishing net" , "Paris's river" , "Paris river" , "Parisian river" .)