I seriously doubt that we would respond to a nuclear terror attack with a nuclear response. You will note that although the 9/11 terrorists did damage almost equivalent to a small nuclear warhead, we did not nuke Afghanistan. Heck, we didn't even carpet-bomb Afghanistan.

If we tracked a bomb back to a specific nation (I'm assuming a terrorist weapon, not something like North Korea lobbing a missile at us), the maximum appropriate response would be to remove the government like we did with Iraq and Afghanistan, not flatten the cities. Whether this is practical or not is a separate question.