You are. You are arguing that people might wish for Israel to be nuked because they are
frustrated by Israel's actions. Can you not see how moronic this statement is? As for your other point, I did not deny that the palestinian hatred is fuelled by Israeli actions. However you cant justify suicide bombings and the purposeful killing of innocent people entirely upon this. As I said, there is a whole level here of religious fanaticism, especially when it comes to Hamas and Islamic Jihad, which people like you willfuly ignore.
Look at this for example:
http://en.wikipedia.org/wiki/Murder_of_Shalhevet_Passare you really going to argue that a grown man purposefully murdered a baby just because of Israeli actions? come off it.
As for your first question, Israel has nukes because they serve as a deterrent. Considering that pretty much every country in the middle east hates Israel's guts, and considering that there have been 3 wars in which Israel's surrounding arab neigbours attacked it with the intention of obliteration, you can see that this is fairly reasonable.
As for your second question, I would concede that nukes in general should be reduced (including Israel's), and that nuclear proliferation is not a positive development, especially in such a volatile area such as the middle east. The president of Iran has publicly wished to wipe Israel off the map, and the country is ruled by a bunch of medieval ayatollahs who go against every notion of liberalism and modernism. It becomes fairly clear that the notion of Iran acquiring nukes is not desirable at all, obviously not for Israel but not for world stability either.