Please tell me, could my blood sugar level fall below 7 mmol/l by natural sugar control if i have type 2 diabetes?

It depends...: It depends on the severity of illness. If your blood sugar is over 200, and hga1c is over 9, your likelihood of changing it to getting it down is very low with diet/exercise alone. Not impossible, just very unlikely. However, if you hga1c is running 7.3, and your fsbs is running about 130's, i would say it is possible. Follow the south beach or slow carb diet if your doctor agrees.

Yes: 126 mg% is the cutoff defining diabetes in the fasting state. Yes though blood sugar can be normal in the well controlled diabetic.

Yes: Not sure what you mean by natural sugar control. However once you have diabetes for 5 years you loose counterregulation of glucose control. Exercise can increase glucose absorption by muscles and increase risk of hypoglycemia