Greetings Mark! Tha haaretz article (or rather report from another article) is misleading. The sunday times, as having been reported by the "foaming-at-the-mouth-rabidly", JPost, is of course as you say, diesel and battery driven. It is however assumed by everyone but Israel (remember, they have no nukes =P) , to hold cruise misslies with a nuclear warhead. Probably strategical, and here I thought these subs were supposed to be "Second-Strike" detterence. It makes no sense as far as I can understand to rattle the atomic sabre in front of Iran when one is trying at the same time to hinder and blacklist the Iranian nuclear project. It kindof draws attention to Israel instead. So yeah, to sum it up, no nuclear subs, but nuclear armed warheads on submerged and hidden launchers instead...
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from the article: Report: Israel to deploy nuclear-armed submarines off Iran coast