Drain clams, reserving clam juice. In a large saucepan, cook bacon over medium heat until crisp, stirring occasionally.
Remove bacon with a slotted spoon; drain on paper towels.
Add onion to drippings; cook and stir 4-6 minutes or until tender. Stir in flour until blended. Gradually stir in water and reserved clam juice; cook and stir until bubbly.
Add potatoes and seasonings; bring to a boil, stirring frequently. Reduce heat; simmer, covered, 20-25 minutes or until potatoes are tender, stirring occasionally.
Stir in milk, parsley and clams; heat through. Top with bacon.