Israel doesn't need to nuke Palestine, the current strategy to expel them from the area is working just fine.
Anyway, Israel has threatened to use nuclear weapons against Iran, as a response to Iran's alleged nuclear program.
Quote:
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Israeli President Shimon Peres says the best way to deter Iran from continuing its nuclear program is to threaten it with a ‘nuclear response’.
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Israel Threaten Iran With Nukes Pak Alert Press