In order to spare expense neighbors fenced in the "level" portion of their property--approx. 2 feet inside the property line. The un-level part of their property--facing us-- includes, unattractive landscaping & the unattractive side of their wooden fence. Fence support structures at the base & a sharp grade make it difficult to clear or plant anything to better mask the fence. They intend to replace a tree (removed by PG&E);and although on their property, the TBD tree will be on our side of the fence. When neighbors first asked to construct the fence we consulted a lawyer who urged us to accede to neighbor's wishes in the spirit of being a "good neighbor." I think I should insist they move their fence & enclose their property completely.
Real Estate Attorney
The short answer is that, yes, you can insist that they move the fence back to the property line.
What you should do, on the other hand, is a matter for a long talk with an experienced property attorney.
Construction / Development Lawyer
The neighbors asked, and you agreed. There is no legal restriction on you now revoking your earlier agreement. But I don't know that there is anything you can do to force the neighbor to put up a new fence.
The better approach might be to come to an agreement with the neighbor to put in a new fence on the boundary line and you can split the cost. If not, then you could put your own fence up just inside the property line to hide what you don't want to look at.
As for the tree, if it is on their property, they have every right to put it in. Unless doing so violates some sort of local ordinance.
You may want to consult with a local attorney before doing anything.