Variational calculation based on a continuum dielectric model, and numerical simulations based on the RWK2-M water potential and on a pseudopotential for the electron-water interaction, are used to evaluate excitation energies and optical spectra for bound interior states of an excess electron in water clusters and in bulk water. Additionally, optical data for surface states are obtained from numerical simulations. The simulation approach uses adiabatic dynamics based on the quantum-classical time-dependent self-consistent field (TDSCF) approximation and the fast-Fourier transform (FFT) algorithm for solving the Schrödinger equation. Both approaches predict very weak or no cluster size dependence of the excitation spectrum for clusters that support interior solvated electron states. For an electron attached to the cluster in a surface localization mode, bound excited states exist for most nuclear configurations of clusters down to (H2O)18 -, and the corresponding excitation energy is strongly shifted to the red relative to that associated with stable internal states in larger clusters. Binding and excitation energies associated with surface states are about half the value of these quantities for interior states. The present variational continuum dielectric theory is in relatively good agreement with the simulation results on the size dependence of the relative stability of interior states. However, it strongly underestimates the vertical excitation energy of the solvated electron. It is suggested that optical spectroscopy of excess electrons in water clusters could serve as a sensitive probe of the transition from surface to interior localization modes as the number of water molecules in the cluster is increased.