My 7 yr old purposely trying to hurt the baby

Since we’ve had our baby (now 11months old) our 7 yr old has had several nightmares (at least once a month, sometimes more) that someone killed the baby. Once the baby became mobile my 7 yr old tried to force the baby to do things even when the baby doesn’t want to, like hold a cup, walk in a certain direction, or even play with certain toys. I often have caught her randomly shaking the baby pretty hard by the shoulders or hands when the baby doesn’t do what she wants also, I have sat her down and explained over and over that the baby isn’t a toy and she can’t force the baby to do things. Tonight (as I was doing dishes) for no apparent reason, she grabbed the baby by the arm, squeezed it so hard it left finger prints, and tried to force the baby’s arm behind her back and laughed as the baby started to cry. As soon as I heard the baby cry I separated them immediately and discussed how inappropriate it was with her. I asked why she did it and with a smile she says idk...What the hell do you do in this situation? I don’t want to think my child is possessed or something, but why would she intentionally try to hurt the baby? Has this happened to anyone else. Please help me!