Neighbours barking dog is making housetraining very hard

Hi,
I was hoping someone here might be able to suggest something to help me out. My neighbours dog has for years been terrible while outside. He will charge our fence, barking, pawing at it, growling everytime it senses someone is on the otherside of it. The problem is that area of our yard is the 'pee and poop' spot for our dog. When our golden was alive he would get terrified of the dog and sometimes refuse to 'get busy'..begging to come back inside. Now that we have a new puppy this is posing a HUGE problem for us. While taking our pup outside to 'get busy' the dog will charge the fence creating absolute fear in our puppy. She will run away and beg to get inside. Even if we stay with her you can tell she is afraid because she keeps looking at the fence. I'm at my wits end!
The neighbours windows are open and in my mind there is no way they can't hear what is going on. I try and correct their dog but nothing works. I've approached them in the past in a round about way during conversations and mentioned that my golden was afraid of their dog and would sometimes refuse to go get busy. Their response has always been to call their dog inside and say, "Oscar, come get a cookie"..geesh. They never bother to come outside to correct it. Often by the time they have called him in it's too late, the damage is done.
How on earth can I keep this peaceful but get this darn dog to stop it's bullying ways?