Talk with your neighbor. Tell them this is not acceptable and that the status quo is not acceptable. Tell them to either chain up his dog, remove his teeth and claws, give him away or sell him, put it down, or you'll ask the cops to do it for them.
Insist that this has happened a couple of times, and that they must do something.
In the meantime, I'd try to get your dog inside your house or to a relative's place; somewhere out of reach of the pit.
