Iran says, and at this point there's no good reason to disbelieve them, that they don't want to give up their program to develop nuclear power, including enrichment of uranium. Iran is willing to fight, rather than give up their nuclear plans.
You have to ask yourself, why would a country need to develop nuclear power when it has so much oil? Google around. You'll find that Iran has 9% or 10%, at least, of the world's proven oil reserves, and is OPEC's second largest producer of crude.
And how will Iran fight to save its nuclear program? Wretchard at The Belmont Club has published a link to the American Thinker, which translated and republished Iran's bellicose response. Here.
The threat is to detonate a nuclear bomb high in the atmosphere above us, to completely disrupt all electro-magnetic activity. That, folks, is a big deal.
Well, let's see now. What have we done to make the mad mullahs of Iran mad at us? Have we attacked Iran? No, actually I think we got along just fine with Iran, until they trashed our embassy and held a bunch of American hostages through the balance of President Carter's stewardship of United States national security. (I think he was of the opinion that war was not the answer.) Even then, we've pretty much left the mad mullahs alone, except to say bad things about them.
I'd say we are at war, and I think they'd say we are at war. Not that war is the answer, mind you.