Just to clarify a little bit. But the 700 range of numbers was actually reserved for passenger JET powered aircraft. Therefore making the 707 the first design of the new series of aircraft that Boeing offered. The gun was jumped to 707 from 700 because Boeing wanted to keep the same number tradition that they had been using, ending the model numbers with a 7 (e.g. 247, 307, 367, 377). Don't ask me why that was the case. Yes the internal designation for the KC
-135 is in fact 717, but as the term was never used outside of Boeing, it was reused for Boeing's adopted 100 seater. As far as the 720 is concerned I heard that it was originally meant to be called the 707-200 (noting that the actual 707 series jumps from -100 to -300). I think (and correct me if I'm wrong) that Boeing finalized on the 720 because the aircraft had enough differences between itself and the true 707, that it should be distinguished as a different design, but not a full fledged new design, thus reserving the model 727 for a completely different aircraft.