Don't let anyone pet the dog, he's obviously a liability at this time. Talk to the parents of the kids who tease the dog. NEVER let your dog outside unsupervised. Your dog is being tormented and is doing the right thing by defending his territory but unfortunately he will ALWAYS lose against the kid in court, even if the kid was videotaped smacking him with a hammer. Build a better fence, preferably surround it with a hedgerow, anything you can do to get distance and sight blockage from the kids. If you know of any GOOD kids who listen well (preferably those who live with dogs), enlist their help in teaching your dog that some kids are actually good. Have your dog on a strong leash and a strong collar (or two, paranoia is never a bad thing in this case), then have the kid stand a few feet away and toss your dog's favorite treats to him. This is a great way to show your dog that not all kids are bad, and hey, some of them are goodie vending machines! No petting, though. No off-leash work in an area where it may be unsafe with people/kids suddenly coming by.
Training classes would be an excellent idea right now as well. You may have to speak to a behaviorist as well. I know my post may sound scary, but it's just as easy to take this dog as an over-exuberant juvenile, not an aggressive/fearful dog. Hard to say. If he just jumps and nips out of excitement, he needs to be taught how to sit nicely for petting. If he's fearful, obedience in general and lots of socialization will help. Stick around, I'm sure you'll have lots more advice (and probably better advice!)
Training classes would be an excellent idea right now as well. You may have to speak to a behaviorist as well. I know my post may sound scary, but it's just as easy to take this dog as an over-exuberant juvenile, not an aggressive/fearful dog. Hard to say. If he just jumps and nips out of excitement, he needs to be taught how to sit nicely for petting. If he's fearful, obedience in general and lots of socialization will help. Stick around, I'm sure you'll have lots more advice (and probably better advice!)