Restore iphone dialog box

When I click on "Restore iPhone" or "Check for Update" a dialog box opens up.

Equipment:

MacBook Pro

iPhone 5s

Versioning

iPhone IOS is up to date (e.g. 8.3)

iTunes is up to date (e.g. 12.1.2)

iPhone is synched and backed up to iTunes (verified in preferences-->devices)

I also deleted the back up and created a new fresh one

1.7GB free on the iPhone

Backup over cloud is turned off

Ideas tried so far:

I have tried deleting (in ~/Library/Preferences/):

'com.apple.iTunes.plist'

'com.apple.iTunesHelper.plist'

In a terminal window I have also tried:

defaults write com.apple.iTunes disableCheckForUpdates -bool NO

I have restarted the computer and the iPhone from scratch as well multiple times for each sequence/attempt.

Note, if I try to restore from backup I get a warning that there is not enough space (which I also find strange--even with a fresh/clean backup).