Help with iphone update to 7.0.4 - wont restore or leave the connect to itunes screen

Hello,
I am currently overseas in Thailand and decided to try to update my iso from 6 to 7. Initially I went through settings>software update with a strong connection to wifi - it downloaded on my phone but then instead of updating came with the screen connect to itunes (I am thinking because there wasnt enough space on my iphone?). I have now connected it to a computer with the most updated version of itunes.
The screen on itunes looks like this:
IPhone Recovery Mode
Your iphone software is up to date, iTunes will automatically look for an update again on the 24/2/2014.
The two buttons below say "check for update (grey)" and "restore iphone (can click)" - I have clicked restore iphone and it proceeded to download iphone software update (1.12GB) - once downloaded nothing changes, i cannot apply the download to my iphone and still my iphone has the connect to itunes screen - I have done this twice and nothing has changed.
I would really appreciate any help or advice on what is happening, and why it cant restore my iphone -
Apple tech geeks encouraged to respond!!! please!!! I really need to have my iphone working again.
Thankyou in advance
Elyssa
At all stages I have tried holding the circle button and top button to reset iphone but nothing changes!

Put the iPhone in DFU mode, (Google how to put iPhone in DFU mode).
Shift+Restore if using PC, Option+Restore for Mac, point to already downloaded firmware. You may have to un-hide folders to see the .IPSW file

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