My first two babies are spaced the same, and when we had our second (DD Zoey) Owen loved her so, but beat on her regularly. It was so difficult for all of us! I found myself yelling often "Stop mauling her!" I also tired the gentle verbal cues "Gentle touch please. . . Baby Zoey likes gentle kisses on her belly . . " But none of it seemed to work. My son was (and still is) a very physical child (as odd as this may sound, I mean this in an emotional rather then agressive or active way -- he has always needed lots of touch to know that he is safe in the world). I believe that all of the changes of having a new baby around really lead him to seek out physical stimuli with this new baby. So when he became aggressive with her, I used the verbal cues, but added physical stimuli. Sometimes, I would say, "i wonder if Owen needs a big hug . . . how bout if I hug you and hold you in my lap?" Or "Let's go for a walk, " "Let's do ring around the rosie . . ." This diversion to positive physical stimuli really seemed to work.
Interestingly, We just had our third baby, and Owen is having the same struggles, but deals with the physicality differently. Instead of hitting, he is picking baby brother up, trying to hold on his lap, or worse, trying to carry across the room! The old tricks don't work, so i have to come up with some new ones!
HTH! Good Luck
Mom to Owen (11-14-00), Zoey (4-3-02) and Zeke (9-1-04)