I don't think for a minute Iran is going to instantly lob a nuke at Tel Aviv as soon as they finish their weapons program. However, I think the testing and its timing is intended to provoke Israel into a pre-emptive strike. The world will pay a lot more attention to any such attack then they did to the one on Syria's nuclear weapon's facility, which barely got noticed. The price of oil will shoot through the roof and the global economy will stand on a terrifying precipice.
If for some reason Iran is allowed to develop nuclear weapons the world is also kinda fucked. For instance, Iran decides to tax any ship going through the straights of Hormuz at 1000%. Don't like it? Go on, have a go, if you think you are radioactive-proof enough.
Anyone who thinks they are developing them for purely defensive means to counter the aggressive USA is a retard, I'll say just in passing