Neither, and both, is the answer.

You might think, "What is this?" It may sound contradictory. It is like this.

In yoga, the state where the subject, object, and action become one is the true destination of meditation. In Vedanta, Atman is neither the subject nor the object, but the whole. Since the whole is undivided, there is neither subject nor object. That is the destination, but in reality, it has been that way from the beginning, but we are not aware of it, we do not understand it, we do not recognize it, which is called Avidya (ignorance).

Now, meditation starting from such a state is, initially, either the subject or the object, or both. If it is the subject, it is concentration; if it is the object, it is observation. However, even if we say so, the subject and object are a set, so if there is concentration, there is observation. Even if you think you are observing, there is always a subject that is doing it. Even if you think your meditation is concentration, if there is an object, it also involves observation. Conversely, even if you think your meditation is observation, there is a subject that is observing. Therefore, observation and concentration are a set. That is, they are a set from the perspective of subject and object.

Here, the interpretation is that the subject is concentration, but people who practice observation meditation may not use such expressions. Instead, they might say that observing softly means there is no concentration, or that it involves a slight, vague concentration. Therefore, people who practice observation meditation might say that observation is not concentration, or is not the main thing, but regardless of whether it is strong or weak, there is concentration. Ultimately, it is a matter of the world of subject and object. People who practice observation meditation may object to this explanation, but it becomes unclear when using the words "concentration" and "observation," so the perspective of subject and object is easier to understand.

Concentration meditation: The subject is the main thing, and the object is present but weak.
Observation meditation: The object is the main thing, and the subject is present but weak.

It is not that different, but only the focus is different, and there is not much difference in the fact that there is a subject and an object.

The existence of a subject and an object is also duality.

Then, what is the state where there is no subject and no object? In simple terms, it is oneness. It is the state called Samadhi in yoga, Atman or Brahman in Vedanta, or Isha-vara.

The goal is to start from a state with duality and move to a world beyond duality.

Therefore, meditation is both concentration and observation, and both, but at the same time, it can also be said to be neither.