Will an Iran with nukes be good news for Israel?

Well, when I put it this way it sounds a bit crazy. Something that only Dr. Strangelove would consider. But try to think out of the box. And to help you do that here is an article, "Is Nuclear Parity with Iran a blessing for Israel?" that my friend, Trita Parsi, who (as his name suggests) is an Iran expert, published in the January 2006 issue of Jane's Intelligence Review
Here are some of the main points that Parsi makes:

* Israel's strategy of maintaining military might in the Middle East may not be the best way to bring peace to the troubled region.
* While neither Iran nor the West has shifted their resolute stances in the nuclear stand-off, Israel is slowly starting to prepare itself for the "day after."
*A nuclear Tehran will not only end Israel's nuclear monopoly, it will also shake a fundamental tenet of Israel's military doctrine -- the idea that Israel can only survive in the Middle East by maintaining military superiority.
* An increasing number of Israeli strategists are quietly reaching the conclusion that nuclear parity, although risky, can bring stability and peace to the region.

It's a long article. And I think that you'll need to register. But here the part in which Parsi discusses a scenario in which a nuclear Israel and Iran will have to adopt a MAD strategy:

Reuven Pedatzur,director of the Galilee Centre for Strategy and National Security,has long asserted that Israel’s defence establishment needs new patterns of thinking. But paradigm shifts are usually born out of momentous events, and the loss of Israel’s nuclear monopoly in the region may constitute such a trigger.
If disparity is lost, it will most likely prompt two key developments that some argue can gain Israel the peace and stability that military superiority failed to produce. First, a new military doctrine will be adopted – mutual assured destruction
(MAD). This will compel Israel to end its long-standing policy of nuclear ambiguity.
The crystallising geopolitical rivalry between Israel and Iran has been ambiguous precisely because Israel felt it had the ability to pursue a complete victory. Under nuclear parity, however, that option will be lost and ambiguity will be replaced with deterrence.
Unlike the current situation, deterrence requires communication. Ambiguities
cannot be resolved and red lines established unless channels of communication are
opened between Tehran and Tel Aviv.Increased communication “can have positive
effects on the relationship between Iran and Israel,” according to Leon Hadar, an research fellow at the Cato Institute in Washington DC, as it will end the dangers inherent in the current state of uncertainty. The existence of nuclear weapons programmes can tame the behaviour of both sides and reduce the probability of overt aggression, since the cost of failure will be infinitely greater than at present. Deterrence also forces Israel to ascribe to Tehran a level of rationality presently absent in its thinking.

I know. I know. It's all very counter-intuitive. But look where we ended up with the same guys here and in Israel promoting the conventional wisdom. Maybe it's time for new thinking.