A clock has hands but cannot clap. The word "hand" potentially refers to many different things; in this riddle it is assumed that the first use of the word "hands" brought to mind is of the hands of the body.
Hand is commonly used to refer to the body part at the end of the arms, but there are many other definitions. Hand sometimes refers to a hand in a game of cards, the hands of a clock or watch, or the unit used to measure the height of a horse. Hand is also sometimes used as a verb meaning "to pass," as in "Hand me that plate."