I am a strong believer in the power of Dr. Seuss for your little one. If you read the simpler Dr. Suess books to your younger one, she'll memorize the text nearly immediately because it rhymes. Then you can let her "read" the book to you, and she'll feel good that she can read a whole book all by herself. Then you can tell her what a GOOD reader she is! The next thing you know, with luck, she'll want to read. This worked with our six year old, and now she owns all the Dr. Seuss books. I found most of them in that little tiny board book size - just right for her to carry around.
As for your 7 year old, our 8 year old loves stories and wants to read, but it is really hard work for her. We sit with her and have her read to us outloud, and talk about what she is reading. We've been doing that for about a year now, and it's helped a LOT. She loves the individual attention. Also, try to read when she's not tired. I know the temptation is to read before bed, but our daughter has a much harder time doing the tough work of chunking and sounding out when she's tired. We also do some playful stuff to keep her attention. Sometimes we take turns reading paragraphs (she reads four or five, then I read a couple) so that she can rest. Reading is still hard work for her, and she appreciates even the paragraph or two "off". Othertimes, we actually SING the lines! This was her idea, and for whatever reason, it seems to help her focus. A final thing we do is... when she is tired, we use a book mark under the line she is reading. It helps her keep her eyes focused onto the right words. Our daughter likes many of the series for her age, but we've found Judy Moody books to be really great reading practice because there are so many nonsense words and words that are spelled phonetically instead of the "right" way, that she knows she has to slow down and sound out. Because the crazy words are part of the fun, she doesn't realize she's practicing her reading skills. In the other books, if she doesn't know a word, her tendency is to take a guess about the word rather than do the chunking.
I hope any of this helps. Know you're not alone with these struggles! Good luck!