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Combine potatoes and clam juice in a medium saucepan over high heat. Bring to a boil then simmer until potatoes are fork-tender, about 10 minutes.
In a large pot, cook the bacon over medium heat until crisp and brown, about 8 minutes. Remove bacon from pot and place on paper towels to drain. Dice into 1/4-inch pieces. Melt butter in pot, then add onions and bay leaf. Cook, stirring frequently until onions until translucent, about 7 minutes.
Stir in flour and whisk constantly until roux has thickened, about two minutes. Add clams and their juice, potatoes mixture, bacon, milk, cream, and paprika. Bring to a boil then reduce heat and simmer gently until lightly thickened, stirring occasionally, about 7 minutes. Season with salt and pepper to taste, garnish with chopped parsley if desired.