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That article cited in your post refers to 400 nuclear devices, which I will assume are warheads. I cannot imagine that number is anywhere near correct (although I wish it were).

In my opinion, the largest obstacle for such an arsenal would be the large amount of weapons grade nuclear material needed. Where would Israel get it? There is no way they could produce that much in so short a time, and I find it hard to believe that the U.S. would send over that much of it to them.

The second obstacle is quite simpler - what would the delivery vehicles be for the weapons? The amount of targets reachable by the Israeli airforce is not that high - certainly nowhere NEAR 400. Are they putting 50 warheads on each of their three deisel subs? Doubt it. Unless Israel has somehow developed ICBMs, and also has "world power" aspirations", the 400 number seems ridiculous.

I believe it. Remember that Israel is surrounded by nations and people whose sole mission in life appears to be the destruction of Israel and the extermination of all Jews (the destruction of the "Great Satan" USA being a close runner-up). With Israel, it's not just about deterrence but about their very survival. If a nuclear bomb went off in Washington D.C. or New York, the United States can still function as a nation. If a nuclear bomb went off in Tel Aviv, all is lost. You can bet that they are prepared to annihilate anybody who threatens them with a nuclear bomb.

Which leads me to believe that Iraq isn't anywhere close to nuclear capability. If they were, Israel would have already acted. You only need to look back to 1981 for an example of Israel's resolve to ensure that nobody in the Middle East poses a nuclear threat to them.