  We present new results of the HESS J1731-347/SNR G353.6-0.7 system from
XMM-NEWTOM and Suzaku X-ray observations, and Delinha CO observations. We
discover extended hard X-rays coincident with the bright, extended TeV source
HESS J1731-347 and the shell of the radio SNR. We find that spatially-resolved
X-ray spectra can generally be characterized by an absorbed power-law model,
with photon-index of ~ 2, typical of non-thermal emission. A bright X-ray
compact source, XMMS J173203-344518, is also detected near the center of the
SNR. We find no evidence of a radio counterpart or an extended X-ray morphology
for this source, making it unlikely to be a pulsar wind nebular (PWN). The
spectrum of the source can be well fitted by an absorbed blackbody with a
temperature of ~ 0.5 keV plus a power-law tail with a photon-index of ~ 5,
reminiscent of the X-ray emission of a magnetar. CO observations toward the
inner part of the HESS source reveal a bright cloud component at -20+/-4 km
s^{-1}, which is likely located at the same distance of ~ 3.2 kpc as the SNR.
Based on the probable association between the X-ray and $\gamma$-ray emissions
and likely association between the CO cloud and the SNR, we argue that the
extended TeV emission originates from the interaction between the SNR shock and
the adjacent CO clouds rather than from a PWN.
