Iran seeks to be a member of the Nuclear Club, an exclusive group of nations that officially includes the US, Russia, China, France, the UK, India, and Pakistan. There may be some other members, such as the Ukraine and other former Soviet Republics. Israel has never publically acknowledged having nuclear weapons (although everyone knows they do), so they aren't officially members of the Club.

Simply by having a few nuclear weapons, the dynamics of dealing with a nation changes. For example, you can't easily launch a massed troop invasion against a nuclear power because the nukes could take out the ground forces.

It also opens up nuclear blackmail potential that can constrain other nations options. For example, China has a couple dozen nuclear missiles with the range to hit the US, compared to some 500 US ICBMs and hundreds more SLBMs that can hit them back. However, those Chinese missiles can be used to threaten the US should we want to stop China from, say, invading Taiwan. Would we be willing to risk a couple dozen US cities for Taiwan, even if we have the ability to massively retailiate? The same applies to North Korea - they're developing both nuclear warheads and missiles with the range to threaten perhaps Anchorage and Honolulu. Would we be willing to risk those cities should the North decide to move towards the South? It is precisely to reduce the potential of nuclear blackmail by smaller nuclear states that's the motivation for the national missile defense effort.

Iran doesn't need enough warheads to destroy Israel, they just need enough to threaten places like Tel Aviv and the means to deliver them. Israel is addressing this possibility by maintaining not only an extremely capable air force but by fielding the Arrow anti-missile system. That doesn't completely eliminate any nuclear threat from Iran - there's still the possibility of sea or smuggling delivery - but it's a start at eliminating the nuclear blackmail threat.