Israel needs to learn that having a good relationship with its neighbors in the region cannot always be about having the most fire power. Israel and Iran have many things they can offer each other in exchange for peace including trade agreements, industry, tourism, etc. Israel itself probably has nuclear weapons, so Iran having them would just put them on more equal footing anyway. Then they will both have a reason to not fire the flames of war.
The way I look at it, I don't really think they have all that much of a choice. They don't get to control the policies of a sovereign country, and it's not as though Iran sits right on their border.
They especially don't get to say anything when there is a high likelihood that they have nuclear weapons themselves.
Besides, Iran is developing its nuclear capabilities for peaceful domestic energy. This rings true to me because, if you look at Iran, it seems to me that nuclear is about their only option unless they want to stick about a couple million fans for wind farming out in the desert.
On top of everything else, it's been centuries since they attacked anybody else, so to think that there's some imminent attack is just paranoia.
Israel can certainly live with a Nuclear Iran. Israel is suspected to have nuclear weapons and is U.S. supported so they definitely have their own capabilities. Since nuclear weapons now have the ability to wipe out entire nations and with all nations having "second strike" capability, it does not make sense for Iran to attack Israel with a nuclear weapon because they Israel will retaliate with a nuclear weapon of their own which ensures mutual destruction.
A nuclear armed Iran will put significant strain on Israel. If Iran gets a nuclear weapon, it is possible that they will share this technology or sell their nuclear arsenal with other middle east countries that threaten Israel. It is also possible that Israel may attack Iran if it acquires or when it is close to acquiring nuclear weapons, starting another Middle East war. Although Israel has a strong military and significant US support, it may be forced to make drastic decisions (ie use their own nuclear weapon) that ultimately lead to the elimination of Israel.