腕時計をしています (udedokei wo shiteimasu) means "checking watch", or "checking the time". In this case, the subject is ambivalent so there it's really hard to decipher really which direction this comment was sent. Though, most likely the subject was the person themself indicating the correct interpretation to be "I'm checking the time".
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This sentence doesn't make sense together in Japanese. ã—ã¦ã„ã¾ã™ (shiteimasu) means "(I) am doing (something)", while ã„ãŸã„ (itai) may be used to mean either "hurt" or "want to be".