Iran has elections in June, and with oil prices way below what is needed to sustain Mahmoud's latest economic investment plan (this part was of the "share the wealth" variety) and new US, UN, and EU sanctions imposed against Iran due in part to Ahmadinejad's indifference and defiance towards the Bush administration- I see a tough race ahead for him.
Due to these sanctions, inflation and unemployment are very high. This has left Ahmadinejad unpopular at home, and a few weeks ago former President Mohammad Khatami, known as the "moderate" in Iranian politics, threw his hat into the election ring and will run against Ahmadinejad and Mehdi Karroubi (a center-right reformist conservative cleric).
That being said, the President of Iran has no say in defense issues and is not the commander in chief. The Supreme Leader controls most of the agenda for the country, with the President being a figurehead that answers to the people and sets domestic policy. Khamenei's word is binding under Islamic law, and his condemnation of nuclear weapons is strongly worded.
http://web.archive.org/web/20051016053118/http://www.irna.ir/en/news/view/line-17/0508104135124631.htmWhether you believe him or not, is another case. The 2006 National Intelligence Estimate done by CIA officials did conclude that Iran closed off the avenue of nuclear enrichment with regards to weaponry in 2003 and has not since committed new efforts of rejuvenating the process.
I think the next Israeli government has enough on the table to deal with, and if they need to gin up some approval ratings and choose violence to do so, they need not look further than Hamas again. It is always popular with the country to do so, whereas Iran could turn into a Vietnam-like PR failure, to say the least!
I don't think that anything will happen with Israel and Iran militarily speaking. Any land invasion would have to cross through Jordan or Syria unless it was an amphibious landing, and I don't see either country allowing such a thing. An amphibious assault with heavy air support would be the only way I could ever see war between Israel and Iran going down, but there will not be Washington backing on such an endeavor under the Obama administration. That last fact alone means that it is not going to happen.