Thanks for getting back to us and keeping us up to speed on what you're encountering adar210,
Is the Apple Watch that's being set up, a model with cellular
functionality? It doesn't need to have an active cellular plan currently set
up.
If so, let's try the following steps, testing again after each, to
see if you can complete the setup process:
First, backup and update the iPhone you're using for the setup.
You can find guidance on updating, here: Update your
iPhone, iPad, or iPod touch
Next, make sure the iPhone is connected to a private home Wi-Fi
network for the process, and that the date and time on the iPhone are set
correctly, or "Set Automatically" is enabled as described here: If you can’t
change the time or time zone on your iPhone, iPad or iPod touch
If you use a VPN or have other security software installed on
the iPhone the setup is being completed from, it might interfere with the
pairing process. Try disabling any such apps or temporarily removing them.
Check the iPhone Settings > General > iPhone Storage for
an Apple Watch software update. If one is found here, swipe left to delete it.
Try deleting and re-installing the Apple Watch app on the
iPhone.
Temporarily disconnect any paired Bluetooth devices setup on the
iPhone, you don't need to unpair them, just make sure they aren't connected.
Finally, if there's still no change, reset Network Settings on
the iPhone, by tapping Settings > General > Reset > Reset Network
Settings. This step will reset saved Wi-Fi networks and their passwords, as
well as customized VPN or APN settings. So be sure you have any network
passwords or personalized settings you need first.
We hope these steps help!