Basically, the problem lies in block12. for the block1/2 to take up the total height of the block12, it must have a defined height. This stack overflow post explains that in really good detail.
So setting a defined height for block12 will allow you to set a proper height. I have created an example on JSfiddle that will show you the the blocks can be floated next to one another if the block12 div is set to a standard height through out the page.
Here is an example including a header and block3 div with some content in for examples.
#header{
position:absolute;
top:0;
left:0;
width:100%;
height:20%;
}
#block12{
position:absolute;
top:20%;
width:100%;
left:0;
height:40%;
}
#block1,#block2{
float:left;
overflow-y: scroll;
text-align:center;
color:red;
width:50%;
height:100%;
}
#clear{clear:both;}
#block3{
position:absolute;
bottom:0;
color:blue;
height:40%;
}