Cross posted (with permission) from a forum where someone was asking for help with their dog (modified to remove names):
The most effective approach is a multi-faceted one.
One suggestion I have is to have a TTouch Practioner do a couple of sessions with you, your sons and the dog. The process works on the basis on the fear in gentle and soft techniques. The public library also has books and videos you can watch and the techniques are simple to learn. www.ttouch.com
Second, I would highly recommned "Click to Calm" by Emma Parsons and it will show you how to step by step retrain your dog to first desensitize, then even appreciate your boys. The clicker acts on the amygdala in the brain to calm the dog.
Third, exercise for high drive dogs always helps. By exercise, I mean 40 min 2x a day that gets her heart rate up. Chasing a ball, swimming, steady roughhousing with other dogs, running beside a bicycle etc. This will provide an outlet for excess energy and the chemicals released by the brain has a calming effect.
Regardless of what techniques you choose, it will be a long haul and there are always setbacks. We have had ours (also a recue) a year tomorrow and unexpected fear issues still pop up every now and then. I have been working several times daily training and socializing her at any venue in town to make her a dog anyone would be proud to own. She has made huge strides in her comfort level with "in your face strangers" and dogs off leash but odd sounds in the forest still freak her out.
Donna & Jessie
PS. We have been working Jessie through Sue Aislby's free on-line training program and it's awesome! It provides a step by step process of how to train useful behaviors for a family dog. Once Jasmine is starting to be more comfortable with the boys, they can be a part of the training which will help with changing her view of them and bonding.