http://www.theguardian.com/world/2003/sep/21/israelandthepalestinians.bookextracts

The threatening of wild, irrational violence, in response to political pressure, has been an Israeli impulse from the very earliest days. It was first authoritatively documented, in the 1950s, by Moshe Sharett, the dovish Prime Minister, who wrote of his Defence Minister, Pinhas Lavon, that he 'constantly preached for acts of madness' or 'going crazy' if ever Israel were crossed. Without a 'just, comprehensive and lasting' peace which only America can bring to pass, Israel will remain at least as likely a candidate as Iran, and a far more enduring one, for the role of 'nuclear-crazy' state....

...In this situation, he went on, more and more Israelis were coming to regard the 'transfer' of the Palestinians as the only salvation; resort to it was growing 'more probable' with each passing day. Sharon 'wants to escalate the conflict and knows that nothing else will succeed'.

But would the world permit such ethnic cleansing? 'That depends on who does it and how quickly it happens. We possess several hundred atomic warheads and rockets and can launch them at targets in all directions, perhaps even at Rome. Most European capitals are targets for our air force. Let me quote General Moshe Dayan: "Israel must be like a mad dog, too dangerous to bother." I consider it all hopeless at this point. We shall have to try to prevent things from coming to that, if at all possible. Our armed forces, however, are not the thirtieth strongest in the world, but rather the second or third. We have the capability to take the world down with us. And I can assure you that that will happen before Israel goes under.'"

In the article I saw a couple days before Hooptiewagon linked to this one, several capital cities of Europe, I think Paris, Vienna and others, were spelled out and the context was a discussion with Nixon.