It seems to me that a nuclear Iran will be a greater danger to Iran's neighbors and its own citizens that it will be to Israel. In addition my guess is that the Iranian presidents current spate of remarks is designed to generate support from an Iranian citizenry that is becoming less and less supportive of the Islamist Iranian regime. The danger in all of this is similar to what happened in 1967 as described by Malcolm Kerr (z'l) in his book, "The Arab Cold War". (See page 126 of the third edition for Kerr's characterization of the events in May 1967 leading to war.) In the current case the Iranian president will use the Israelis as a political football in doemstic politics only to discover that this particular football kicks back.
Palestinian reportedly shot dead by Israeli soldiers after approaching Gaza border fence (Haaretz)
from the article: Ahmadinejad can continue to smile while the world argues