Basically it's a transformer where the wire with the current to be tested is the primary "winding" and the secondary is wound around a ferrite core that is "clamped" around the primary (i.e. wire under test). The secondary is wound to produce a step-down ratio such as 100:1 (e.g. 1A = 10ma) and this is plugged into an AC current meter (such as a Multimeter set to AC current). Some AC clamp-on meters employ AC amplification to make them more sensitive for wider current measurement ranges. The trick will be both, to design the mechanics of the clamp, and to calibrate the sucker!
For the clamp, perhaps you can break an iron-powder toroid core in half. I've never tried this before, but if I were, I'd use a Dremel tool with some sort of abrasive bit to score a groove around the points where I want it to break, then clamp it to a solid surface, such as a workbench, such that the half that you want to break off is extended beyond the edge (with the scored grooves tangent to that edge, of course), and then lay a piece of wood on the exposed core-half and smack the top of it with a hammer. The idea being to deliver an even blow to the half that you want to break off. Probably good to put something soft down below to catch the part that breaks off, so it doesn't fall and shatter.
Then, if you acheive that, come up with some way to hinge the thing and perhaps you'll have some kind of success. You could, also, use heat-shrink to cover the iron as protection, or perhaps some Plasti-Dip.
Then there is the Hall-effect solution. The below references are better informed on that than I am :)
I suppose you could use an old oscilloscope crt along with a light sensitive device such as a photo-transistor or CDS cell (Photonic Sensor) . Get the beam going and point the photo sensor at the beam and put it all into a light tight box. Lay the box next to the wire such that the magnetic field it generates causes the electron beam in the crt to deflect and measure the change in light intensity via the photonic sensor--but I jest :)
Not an easy project. If you've never done an electronic project before, I suggest you start with something simpler ;)
Here are a few things a Google search found on the subject:
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http://scienceshareware.com/how-to-measure-AC-DC-current-with-a-hall-effect-clamp-.htm*
http://www.instructables.com/id/2-Carabiner-split-core-AC-transducer/Some interesting stuff about DC clamp on meter designs that might be adaptable to AC:
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http://www.siliconchip.com.au/cms/A_30669/article.html*
http://www.rcgroups.com/forums/showthread.php?t=1145870*
http://www.rcgroups.com/forums/attachmentNew....0e0e301d4ae35d97a29eddf6&attachmentid=2891398*
http://static.rcgroups.net/forums/attachments/2/7/5/0/a2891399-174-clamp meter 2.jpg
