Yup, you are in the infamous 'Friend Zone'.
I posted a topic on this very situation. You can view it here:
how-to-get-out-of-the-friend-zone-vt57874.html
So, according to that article one mistake you made was spending too much time with her to begin with without pursuing her from the get go. The second thing you did was to tell her how you felt.
You need to find out what kind of guys she is attracted to and start being that guy. Put some space in between you two and start seeing other woman. The longer you two hang out as friends, the deeper you will get into the 'Friend Zone'.
Read that article over and over until it all sinks in.
Best,
J-Dub