Commentary on this article by William O. Beeman
Iran has championed the Palestinians and their mistreatment by Israel. It has also defended the Shi'a population in Southern Lebanon that has been attacked in over-the-border raids by Israel in violation of international law. If Israel would resolve the Palestinian issue, Iran would gladly resume diplomatic relations with Tel Aviv, since Iran has no quarrel with the Israeli people, or indeed with Jews. It may be that Sheldon Adelson may destroy Israel by promoting crude right-wing politics directed at the Palestinians, but Iran would applaud the granting of equal rights and independence for Palestinians, and this would effectively end Iran's objections to Israel.
A final point: Iran conducts considerable sub rosa trade with Israel through third parties, and Iranian Jews (and indeed others) can travel to Israel via third countries. The large Iranian Jewish population in Israel are still Iranian identifying with Iranian culture and civilization. There is far more that unites Iranian and Israeli society, but the Palestinian issue is a continual obstacle.