MAD may not work with Iran as many in that country believe in the Mahdi and want to usher in his return by going apocalyptic....
But, our policies and penchant for foreign interventions has definitely taught potential enemies that the only way to avert complete destruction by the U.S. is to get the bomb. If we were going take action against Iran we should have done so right after Baghdad fell. Instead, we allowed ourselves to get bogged down in nation-building. If we are going to act like an Empire we had better improve at it.
I hope that Iran's Mullahs are not fanatics but typical dictators. Those dictators love comfort, feeling of power, and exquisite wine in a country where alcohol can get a common man hanged. All that fiery talk about Mahdi is just to keep the population brainwashed. If the real Mahdi suddenly shows up, those Mullahs will have him killed. The best Mahdi is the one who is always in the future. I hope the same reasoning applies to Iranian words about Israel. They are quick to say words, but how many of those fat Mullahs will personally grab a rifle and go onto the battlefield? They know perfectly well that if they declare war at noon, they should expect a cruise missile in their window about ten minutes later.
You can deal with dictators because they fear you, and they have many things to lose. You cannot deal with fanatics because they fear nothing and have nothing to lose; you can only destroy those, down to the last one.