That was Khatami, who was quite moderate as compared to some other Iranian leaders. I cannot preach to anybody about nukes, especially after the way the west handled the Libya issue. But IMHO Iran will benefit from greater democratization and moderate leaders.
Anyway as regards the bombing incident, India should take a serious view against those responsible. It is not correct to abdicate the responsibility to protect diplomats. What exact steps should be taken, if a state actor proves to be responsible, can be debated.
There was an assassination by Mossad in Dubai recently, which is comparable to some extent. However, in that case the victim was a combatant, whereas here it is the wife of a diplomat.