I've used Phil's instructions to set up a build area with a Makefile.

You can run make build from the top to build things.

build/Makefile

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+# Build the kernel, the filesystem and run SimH
+
+AS=../tools/as7
+MKFS=../tools/mkfs7
+SYS=../src/sys
+
+all: a.rim image.fs
+
+run: a.rim image.fs
+	pdp7 unixv0.simh
+
+a.rim:
+	$(AS) -f rim  -o a.rim $(SYS)/sop.s $(SYS)/s[1-8].s
+	$(AS) -f list -o a.lst $(SYS)/sop.s $(SYS)/s[1-8].s
+
+image.fs:
+	$(MKFS) --debug --format simh proto
+
+clean:
+	rm -f a.rim image.fs a.lst

build/password

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+ken:ken:ken:12
+dmr:dmr:dmr:14

build/proto

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+# Prototype file for PDP-7 Unix filesystem layout
+#
+# Entries are one of:
+#    filename f[r-][w-][r-][r-] uid local_file_to_insert
+#    dirname  d[r-][w-][r-][r-] uid [inumber]
+#    device   i[r-][w-][r-][r-] uid inumber
+#    link     l---- inumber
+#
+# The top directory's name is ignored
+# Numeric values are in decimal
+# Contents of each directory ends with a $ on a line by itself
+# Format was inspired by 6th Edition mkfs
+#
+dd 	         drw-- -1 2
+    system       drw-- -1 3
+	init     frwr- -1 ../bin/init
+	password frw-- -1 password
+        ttyin    irwr- -1 6
+        keyboard irwr- -1 7
+        pptin    irwr- -1 8
+        ttyout   irwr- -1 10
+        display  irwr- -1 11
+        pptout   irwr- -1 12
+        sh       frwr- -1 ../bin/sh
+	$
+
+    as       frwr- -1 ../bin/as
+    cat      frwr- -1 ../bin/cat
+    chmod    frwr- -1 ../bin/chmod
+    chown    frwr- -1 ../bin/chown
+    chrm     frwr- -1 ../bin/chrm
+    cp       frwr- -1 ../bin/cp
+    date     frwr- -1 ../bin/date
+    ds       frwr- -1 ../bin/ds
+    ln       frwr- -1 ../bin/ln
+    ls       frwr- -1 ../bin/ls
+    mv       frwr- -1 ../bin/mv
+    stat     frwr- -1 ../bin/stat
+    ken      drwr- 10
+        system l---- 3
+        $
+    dmr      drwr- 12
+        system l---- 3
+        $

build/unixv0.simh

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+set rb ena
+att rb image.fs
+load -S a.rim
+show dev
+dep pc 0100