I raised four daughters and I feel your pain.
Just do your very best to support him, but make sure he knows that his behavior will not be tolerated.
You can start with his favorite object and remove that from him if he breaks your rule.
He will then lose more objects until he figures it out for himself.
You then start to return these objects as his behavior hopefully improves.
I am not by any means an expert. So if you feel his behavior is above normal childish bad behavior with no success in stopping it, I would contact a professional.
Best of Luck.
As an ex-teacher I'm inclined to agree with Bones on this. If the school have tried to curb this and you have too, both of you with no success, professional help might be the next step. An educational psychologist perhaps? Can the school point you in the right direction? Is this sort of thing available free in your area?
Remember, he is a bully and these girls are his victims.
If this only occurs on the school bus do you live near enough, with a safe enough walking route to school for you to be able to threaten (read "promise") to make him walk to school in future if he does it again? If you can do this you MUST come through immediately the inappropriate behaviour is reported to you.
I expect you know and act accordingly, but warnings to enact punishment if it happens again MUST be carried out whether it's missing a school treat, withdrawal of television privileges, no swimming/football/MacDonald's privileges for a named amount of time, no birthday party or whatever and make it very clear that this IS punishment for his inappropriate behaviour. Do not weaken.
I'm sure this sounds very hard but if he is allowed to think that this is acceptable behaviour he will still be doing it (or similar) when he's 20 years old and likely to find himself in real trouble with either the law or his employers. He's seven for heaven's sake, if his behaviour can't be controlled at this age God help you and his victims when he's big enough to really do damage! Seven year old bullies have a tendency to turn into 27 year olds bullying their wives and children if not sorted out straight at the beginning.