They definitely can breed. It may be as rare as lizard sweat (as my grandmother used to say...) but it definitely happens. I had a basenji-fox mix as a pet. She was the sweetest, gentlest dog I've ever owned. The reason I happen to know she was a mix was because I got her from the SPCA. She'd been picked up as a stray, and I adopted her. She hadn't been spayed, and so the SPCA in my area requires that the animal be spayed within a certain period of time, and papers be shown as proof, or a fine is assessed. I took her to the vet to be spayed, and he noticed some oddities....her eyes weren't quite dog-like. Her tail was DEFINITELY fox-like...so he sent out some genetic material for testing. The results came back basenji-fox, and that she was sterile. The paperwork they sent me served as proof for my city that there was no need to spay her. I owned her for 10 years, until her death, and she never went into heat. The vet and I always assumed it was similar to horses and donkeys, which, while they CAN reproduce together the offspring, a mule, is always sterile.