Step One
Step One would have been to abandon, right up front, the idea that you can buy off a lunatic if you give them enough goodies. More than one president did this with North Korea, and the only result was supporting a regime that went right ahead and did whatever it wanted to anyway.
Here's an interesting news item on this.
As for who gets the first shot in the teeth, I'd lay better than even odds on Israel. North Korea and Iran are cooperating heavily on both nuclear and missile technology.