Don't underestimate Israel, they got some of the most high-tech weapons available on earth. That said, don't underestimate Iran neither, they may have or not have weapons but for sure if they're attacked first the odds are high that China and Russia will choose their side. Do we really want to open that can of worms?
One thing I feel quite confident of: Iran won't be the one attacking. They know very well that if they do that, it's them against the rest of the world. So while trying to be a tough guy may be a hobby of their president, it's just trying to impress the other parties involved. He knows very well that Iran is on its own if they'd attack first. If Iran has weapons (and we're not even sure of that) then it's most likely not going to be used unless they are attacked first, in which case they have the right to self-defend.
That brings us to the question: should Iran be trusted with nukes?
OF COURSE.
Look, I'm a pacifist. If there were a way to take all nuclear weapons away then I'd do it immediately. The damage they can do is so big that no nation should have them.
Unfortunately that's a utopic thought. The US has them, Israel has them, North Korea and Iran may have them... So while i am against the existance or use of these weapons, the honesty tells that if the USA and Israel are allowed to have them, they are in no position whatsoever to tell other countries they cannot have those same weapons. I dislike the regime in Iran and I very much disagree with the dictatorship in North Korea. But in the end, if you're possibly going to be attacked, one thing you cannot blame these regimes for is that they wish to self-defend. I don't trust Kim Jung-il or Ahmedinejad with such weapons, but neither do I trust Netanyahu or Obama with them. In an ideal world, nuclear weapons would not exist. But if they do exist, then one nation being allowed to develop them is in no position to tell another nation they're forbidden to do the same (even if that other nation happens to be Iran or North Korea)
I would like to add another question. Who is the biggest threat with those weapons, assuming that they'd all have them?
Well, let's look at this statistically: North Korea invaded 1 country and has refrained from doing it again the last 60 years. Iran never invaded another country. Israel currently occupies parts of other countries (but OK, this started in a self-defense action), the US has invaded so many other countries for totally void reasons that I've lost track. So pardon me for saying that of all nations especially the US has no right to tell other countries what type of weapons they'd have until the day the US dismantles its own nuclear program.
Oh, and by the way, it's about time the US maybe solves its own problems first and stops interfering with internal affairs of other countries who never asked their opinion in the first place. The games they're playing with South Korea are extremely dangerous as well, North Korea is so sealed off of the outside world that nobody knows what exactly is happening in there. Attacking without knowing what exactly you attack isn't really smart ... Hopefully the US thinks twice before acting, and hopefully the UN can calm them down a bit. Remember Iraq, where we still await for the first proof of mass destruction weapons.
Ideally nukes simply don't exist. Unfortunately they do. If one country can have them, they're in no position to forbid another country to have them. And I'm quite sure if there will be fights (which I hope there won't) it won't be Iran to attack first, because they know they are alone against the world if they'd risk that.