Tried to lite water heater by holding red button and pushing valve knob but no clicking heard

This sounds backwards. You should be holding the valve nob down(in the pilot possition) and then repeatedly push the red button(it is your sparker).

I've tried that also and still no spark

About three inches form the button that you press to make it click there is a push together connection, pull this apart, (not what I am going to telol you to do might give you a little of a shock) Hold the wire that is coming from the button in one hand and click with the other. If you get a shock the sparker is good if you don't it is bad and needs to be replaced. But I have never seen one that is bad. So continue to use the sparker and watch where the connection is and make sure it is not sparking to the water heater jacket from there.

Yes there spark, but wire leads into in case area. Do I remove screws to access it. If yes I will try tomorrow Thank you

No you do not remove anything because if you do it has to be resealed.

Instructions are: 1. make sure that the gas valve is turned on, this should be in the line running to the water heater.

2. Turn the knob on top of the valve to pilot, press down, it should depress about 1/4 to 3/8 of an inch.

3. While holding this knob down click the spark button several times, continue holding the knob down that is pointed to pilot, this should be held for about 35 to 45 seconds.

4. After holding down the knob let it loose and through it counter clockwise to the on position.

5. Now turn the large knob that is on the front of the thermostat to the point where the letter B aligns with the arrow pointer. This big knob is the temprature control, if B is too hot turn to A, if B is not hot enough turn higher than the B. As you turn this knob you should hear the burner of the water heater light.