Yeah, you can't do this at all.
PHP cannot be called by a JS function. So your javascript will always be:
PHP Code:
<script>
function updateDateTime()
{
var outputString = October 4, 2012 6:06pm;
document.getElementById('datediv').innerHMTL=outputString;
}
var int=self.setInterval(function(){clock()},1000);
function clock()
{
updateDateTime();
}
</script>
To have PHP called, you need to implement an AJAX solution and call a PHP script in the background. I don't know if I'd recommend doing that every second, and for a clock that should all be done in the client side, not the server side. The server side can take responsibility of providing the initial time if you are looking for server specific time instead of a client time.