Level 7 in Morrowind is still consider "quite low". Concentrade more in training and level up more. You could always take a break and explore the world to gain a few levels first.
Also, it is better to "provoke" people to fight you instead of killing them outright because if you provoked and kill them (after they attack you), it is considered as "self-defence" but if you kill people outright, you will be fined or put to jail.
The other thing about provoking people to fight you is that his/her friend will not join in the fight, but if you initiate the hostility first, his friends or the guards will group in and slaughter you.
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