Israel will not survive in its current form as a political en y because of the Arab birth rate. That's inevitable. Israel won't be around in its current form 100 years from now, regardless if they forge a comprehensive peace settlement with the Arab world or not. That doesn't mean there will be a second holocaust and no jews living in the land we currently call Israel. It just means that you won't have the current political structure in place now. So in a sense, the political destruction of Israel is going to happen, regardless of what Iran does or doesn't do. The Iranians and the entire Arab world understands this. It's why they don't have to lob nukes at Israel.
The current leadership in Iran could not be more hostile to Israel. Furthermore, Iran is a very young country ruled by very old hardliners left over from 1979. Every time we rattle sabers and demonize Iran, we make it that much harder for the democracy reform movement in Iran to gain traction. Most of the hardline Islamic ethos resides in the rural countryside, not Tehran. Tehran is fairly cosmopolitan and modern for an Arab capital. The same dynamic applies here: when we felt threatened by al-Q, as a nation we elected martial hardliners in the form of Bush and Cheney, even though their views are anathema to millions of Americans. Same dynamic in Iran, they feel like only the hardliners can protect them.