Oooh, it's hard, isn't it! I would totally agree with screamingabdab - including the bit about it passing!
I tried lots of things with my 1st, DD, now 4.8. With hindsight, I think I was probably wasting my time because I think most of the stuff I was trying, like the naughty step, was beyond her ability to understand or learn from.
DS is 2 now and I don't even attempt the things I tried with DD with him - it just seems futile. I couldn't get away with the naughty step with DS now, never mind when he was 18mo.
I agree that it's better to try to soothe his jealousy with more attention, if poss, but I fully know that this isn't always poss. As screaming says, it's easy to start to think, 'OMG, what have I bred?', but don't. It's natural and it'll pass. I just say sternly 'We don't hit'. Sadly, you've just got to live through it, I think. Patience and persistance and firm, low, calm 'no's' would be my best advice - but it's easier said than done. We had our moments but DD was relatively tolerant of DS as a baby but it's only very recently that DD has actually started to enjoy his company and to play with him.
However, safety has to come first. How about putting him in his cot or playpen or even fastening him into his pushhair for a couple of minutes to give you time to calm down or if you do want to reinforce the 'no, that was naughty' thing? At least that way you could walk away, rather than have the escalation of the on/off the naughty step routine.
When DD was 3 we tried the naughty step with gusto but it just turned minor conflicts into nuclear wars and, I thought, served no purpose. Just the simple thing of calling it the 'thinking step' instead makes it easier now she's 4. I ask her to sit on the 'thinking step' and think about what she's done. She seems to accept that more easily and I feel better too because it makes me feel like I'm being less negative.
Although I was fully in favour of devices such as the naughty step, I'm wondering now how useful they are. I want respectful and disciplined kids but, after having read 'How to talk so kids will listen and listen so kids will talk' I'm starting to think that punishment is a distraction from actually getting them to think about their behaviour. It makes a thought provoking (but sometimes toe-curlingly twee) read for when your kids are older.