Durungo: you bet (or wager, hence why it has "wager" on the clash screen) your meter bar with the other opponent. The possible results are as follows:
If the attacker bets more than the defender (note the defender is the one who started the clash), the defender takes damage.
If the defender bets more than the attacker, the defender regains some health.
The amount of damage and health depends on how much that person won by. So if the attacker bets 2 bars and the defender bets 3, the defender wins by 1 bar and gets 15% health back. If they won by 2 bars they get 25%, etc (see xStar's post for the rest).