Apple Watch 3 not pairing
I tried to use my apple watch (3) after 4 weeks of inactivity and it stopped connecting to my phone. BTW, I had a iPhone (7) software update from 11.1 to 11.3 while the watch was not being used. I tried doing a hard reset on the watch and when I try to pair after reset, the pairing doesn't stay. The phone is able to detect the watch, gets paired using viewfinder but on the next screen where it asks to "Restore from Backup" or "Setup as new Watch", it fails. No matter what choice I make, the pairing fails. Attached are screenshots:
The watch is stuck on the following screen:
I have tried all the methods of rebooting phone or erasing the watch but nothing worked.
Apple Watch Series 3, iOS 11.3