A simple question requires a simple answer. Do we or do we not allow them nuclear weapons. If the answer is yes, then we continue along a path of tolerance with them. Notifying them that if they ever use, sell or otherwise peddle one or any of their nuclear devices and it is used in an act of terrorism than we destroy them. Might work, except they love martydom so a form of MAD may be right up their alley. Hmmmm.
If the answer is no, then they must be persuaded that the path they are on is intolerable and to continue on it will result in a war. No one, me included, wants a war, but just the musings of a 911 with nukes makes my hair stand on end.
Do we take their threats as hollow with no real intent or do we take them for face value and react accordingly? I vote for face value. We cannot afford to be wrong on this one. If we err, we should err on the side of caution.
I'm tired now, I need a nap.