Set up process for iphone on continuous loop

I have an iPhone 4 and just updated to the latest operating software.
When I plug my iPhone in it goes through the set up screen asking me to carry out the series of steps - select language country etc and then I get to the "Set up Iphone" with options to:
- Set up as new iphone
- Restore from ICLoud back up
- Restore from Itunes back up
I select the third option and then when connected to itunes select to "Restore backup". The process kicks off and ofr an instant I see all the apps on the screen I have before switching to a "Restore in Progress" screen. This continues until complete and then reboots at which time it goes to the initial set up screen again and then it starts all over again. It is getting incredibly frustrating.
Is there anything that I am doing wrong in the set up? Am I selecting the correct option?
Any help would be appreciated!
Thank you
BA

Try setting it up as a new phone and see if it completes the setup process.
If it does not, there is very likely a hardware issue with your phone and you need to bring it to an Apple store for evaluation.
~Lyssa

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