war of nerves

from The American Heritage® Dictionary of the English Language, 5th Edition.

• noun A conflict characterized by intimidation, threats, or other psychological tactics intended to confuse, exhaust, and demoralize an adversary.

from Wiktionary, Creative Commons Attribution/Share-Alike License.

• noun idiomatic Warfare or other physical conflict in which one or more combatting parties use especially demoralizing and frightening tactics to attempt to unnerve their opponents.
• noun idiomatic, by extension A situation in which opposed parties refrain from direct conflict but maintain a tense, contentious relationship in which each uses annoyances or intimidating psychological tactics to attempt to dishearten and unnerve the other.

from WordNet 3.0 Copyright 2006 by Princeton University. All rights reserved.

• noun the use of psychological tactics to destroy the opponents' morale