Setting up 2nd hand iphone 3gs

Hi
I've bought one of the above but at a loss as to to how to set it up. It's in full working order but was factory reset before I took it.
Therefore as it stands when the phone is switched on it  shows an image of a usb cable connecting to the itunes symbol. We've downloaded itunes to the computer but a the moment nothing is happening - any assistance would be greatly appreciated.
Thanks

This iPhone was hacked to be unlocked, or it was officially unlocked by the carrier the iPhone was sold as carrier locked with when new?
If hacked to be unlocked, that could be the cause of the problem along with opening the iPhone up to major security problems.
Try restoring the iPhone with iTunes as a new iPhone. If the iPhone was officially unlocked, this shouldn't be a problem which may resolve this problem and if not determine if there is a potential hardware problem with the iPhone.

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