Can PHP execute a string containing PHP code?

Hi,

Can anyone tell me how to use PHP to execute a string that contains PHP code 
which contains references to objects and variables such that when the string 
(code) is executed the objects and/or variables are updated (from the 
perspective of the calling program)?

I am in the process of determining if PHP is the appropriate scripting 
language for an application that I am writing.

Thanks in advance.
Jim