Unable to update iwatch

First check you have no other sports watches like Fitbit that are paired to your iPhone  

Then force restart the watch. i.e. press and hold both the side button and Digital Crown for at least 10 seconds, then release both buttons when you see the Apple logo. 

Then while the watch is restarting Force Restart the iphone  

Force restart iPhone – Apple Support (UK) 

Then in the iphone, Settings, General, Transfer or reset iphone, Reset, Reset network settings. Then reconnect the iPhone to Wi-Fi.

Make sure you have no VPN or VPN based adblocker in the iphone in Settings, General, VPN & Device Management.

Then reset the router to factory settings which usually involves a paperclip on a little hole. Some providers advise against this - check with your internet provider

Try again to pair the Watch. 

Some users have successfully turned off Wi-Fi and used the iPhone’s 5G.

Then I recommend reviewing the steps in the articles below 

If you see “Unable to Verify Update” when updating Apple Watch – Apple Support (UK)

How to pair your Apple Watch with a new iPhone - Apple Support

If you can't pair an Apple Watch with your iPhone - Apple Support  If your Apple Watch isn't connected or paired with your iPhone - Apple Support

Series 1,2,3

If you have iOS16 or later on the iphone, series 1 to 3 Watches are difficult to pair because of relatively low storage but…

Ensure the iphone is on iOS16.4 or later.

Erase the Watch completely. Put your watch on its charger and keep it there until you complete these steps. (select the watch OS version) Erase Apple Watch – Apple Support (UK) 

When pairing do not try to restore the backup, pair as a New Watch Set up your Apple Watch – Apple Support (UK)