The correct spelling of the phrase "observe of" is actually "observation of." The 'e' in 'observe' is dropped and replaced with an 'a' to create 'observation', which is then followed by the preposition 'of'. The phonetic transcription for 'observation' is /ˌɒbzəˈveɪʃən/. It is important to use the correct spelling and pronunciation in written and spoken communication to ensure clear and effective communication with others.