Israel wins. I don't think that Iran would really care how many people they lost if they thought they really could annihilate Israel:
If a nuclear war between Israel and Iran were to break out 16-20 million Iranians would lose their lives - as opposed to 200,000-800,000 Israelis, according to a report recently published by the Washington-based Center for Strategic and International Studies (CSIS), which is headed by Anthony H. Cordesman, formerly an analyst for the US Department of Defense. The document, which is largely theoretical due to the lack of verified knowledge in some areas - specifically in terms of Israel's nuclear capability - paints various scenarios and attempts to predict the strategies of regional powers, as well as the US.(via)
[...]
The report assesses that a nuclear war would last approximately three weeks and ultimately end with the annihilation of Iran, due to Israel's alleged possession of weapons with a far larger yield. Israel, according to the assessment, would have a larger chance of survival. The report does not attempt to predict how many deaths would eventually be caused by possible nuclear fallout.
