i've long assumed that netanyahu's seemingly ridiculous analysis of iran (according to mossad, even) is just internal israeli politics - that it's just typical fear mongering, in order to present himself as a protector of israel. the need for an external enemy. etc. there's holes in this, but a better explanation has not been apparent.
but, chomsky brings up some points here that provide for somewhat of an alternate explanation: that there may be a faction of the israeli elite that continues to see iran as competition for preferred american client state. this might seem remote to somebody that was actually born after 1979. but, if you realize that the shah was just as much of an american client state as israel has been since, and perhaps even that israel has taken on responsibilities that america previously designated to the shah, then any thawing of relations - however miniscule - are perhaps a legitimate threat to israeli security. not in the sense that iran is a serious threat to israel in any direct way, but in the sense that it may balance american interest and that is a threat to israel.
of course, this isn't actually happening. and i couldn't imagine any sober analysis concluding there's any threat of it happening. but the threat of the threat of it happening is perhaps in itself enough to require an israeli policy that attempts to hamper even the most minimal of steps towards normalization.
https://www.youtube.com/watch?v=0yiaA1HbhhY