It depends on how you think the friendship will be. Admitting your feelings for her and being rejected may cause saw awkwardness. If you don't want to be a platonic friend with this girl, then just don't do anything about it. Her "friends" comment is one of the most used comments by women in rejecting men. Women do not want to be perceived as evil, so the "friends" speech is just a way to not make it hurt as bad, or so they think. She likes you as a person, but she has no romantic interest in you whatsoever. Please do not try to understand where you screwed up (it's possible that you didn't at all). Women will never be understood and their thought process is totally out of whack. You can use her as a way of hooking up with other girls. I suggest moving on, being polite and courteous to her, but never expecting any sort of romantic relationship.
Edit: I will tell you where you slipped up. This was something that I came to learn. Of course, it does not guarantee 100% success, but it's a lot easier to deal with early on. You mentioned that you were in love with this girl "for the longest time." If you want to get somebody to possibly think of you romantically, you have to get into that mode early on. True, they may want to be "friends first" but get a girl's number, talk with her, ask her out to lunch or dinner if you want. I'm not suggesting overdoing it or getting married to a girl you just knew in 3 months. You have to take your time, but you have to be upfront first.
Of course, it is all trial and error. Every situation is different, and there are so many variables that it is not even funny. If a girl likes you, she'll like you despite some stupid mistake you may have made (I'm not talking about being drunk and having an orgy, but early on in the relationship when you wonder if you should or should not call, if you said something wrong...etc.)