The New York Sun published an opinion piece called, "The Second Holocaust", which gives a detailed account of a scary (and very possible) scenario of a showdown between Iran (specifically under Pres. Ahmadinejad) and Israel that results in Iran nuking Israel. More importantly, it details the reasons why this is a political possibility.
However, the focus of this post is on whether this is theologically possible. There are some (including this comment poster) who hold that, because the Bible says that God would protect Israel, that it can never be nuked without also nuking the faith of every Christian and Jew. However, this is not true, neither from the viewpoint of Catholic theology, nor from history.
As a Catholic, our interpretation of the Book of Revelation is that the New Israel (i.e., The Church) is the one that Christ founded and will protect for all time. The nation/land of Israel is not specially protected in this respect, because through Jesus, God has created a New Israel, not built with stone and by human hands, but built on people and by the blood of the Lamb.
Eventually, "heaven and earth will pass away". Does this not also include the real estate known as Israel? In that respect, we expect a new heaven and a new earth to replace this world. However, Christ’s Church will continue past the end of the age. His Church starts here on Earth as the Church Militant (still fighting the temptations of the world), but continues in Heaven as the Church Triumphant, the exultant Bride of Christ.
Therefore, there is no promise of protection of a parcel of land, just as there is no promise of protection from bodily harm for the faithful – martyrs have been made at every age and time. The loving care of the Father is that he will protect us from those that "may harm the body but cannot harm the soul". Let us pray for the souls of all those in the Middle East, because eventually, this entire world will pass away – parts of it possibly from nuclear annihilation, but the world in total by Christ’s Second Coming. We should be more concerned with saving eternal souls, rather than whether or not temporal real estate belongs to one tribe or another. After all, the nation (or kingdom) of Israel has come and gone several times through human history, but the Jewish people and their faith have been preserved, regardless of location.
The Book of Revelation is not, primarily, an "end times" book. If you read The Lamb’s Supper, you will see that much that the evangelicals believe about this book of the Bible is patently false. The "revelation" in the last book of the Bible is that what goes on at the Mass on Earth is the wedding feast of the Lamb in Heaven. Our sacrifice of the Eucharist on Earth is exactly the same sacrifice on the Heavenly Altar, with all the angels singing "Holy, Holy, Holy". This eternal city, the New Jerusalem, The Church, is the protected and beloved Bride of Christ, and this should be our focus – the salvation of souls.