with Keil the startupcode will be executed first. It will produce a jump to startup at PC 0x0000.

put that absolute address in your startup code; the needed changes are here:

;?C_C51STARTUP SEGMENT CODE
?STACK SEGMENT IDATA

RSEG ?STACK
DS 1

EXTRN CODE (MAIN)
PUBLIC ?C_STARTUP


CSEG AT 07000H
?C_STARTUP: ;LJMP STARTUP1

;RSEG ?C_C51STARTUP
;STARTUP1:
LJMP MAIN
END

then you have to define the code range in your project "Target": Off chip code memory EPROM start 0x7000 size 0x1000.

remarks:
1) You cannot use any interrupts in your flash update program.
2) the hex file will contain a line with jump to 0x7000
you can just ignore it, as long as you program the update software first, or you can delete the line in the hex file manually it looks like this:
:0370000002700318
see explanation of hex file coding on the web

Werner