Wretchard at Belmont Club has a fascinating discussion of the difficulties facing a rogue state which wishes to deploy small nuclear weapons ("suitcase nukes") against a Western nation like the United States. He argues that in order to bring us to our knees the aggressor nation would have to kill about one fourth of our population which means they'd have to deploy some 150 such weapons. This creates severe logistical problems that sharply raise the risk to the aggressor. Go to his site to read his rationale. Also be sure to read the comments, some of which suggest that the explosive yield Wretchard assumes a suitcase nuke to possess is too high.
Meanwhile, however, one possibility Wretchard doesn't mention that must be taken into consideration is that a rogue nation like Iran really wouldn't have to deploy so many weapons against us but rather might choose to risk a gambit something like this:
Working through terrorists such as al-Qaeda, they successfully smuggle two or three suitcase nukes across the ridiculously porous Mexican border and into selected American cities. They might then detonate one in, say, New York, or worse, Washington, D.C. They would then have the terrorists take credit and announce that there are dozens more such weapons scattered in cities all across the country, and any reprisal by Americans will result in another weapon being set off, then another, etc. They also would probably announce that unless the United States abandons the Middle East entirely, including Israel, the weapons will be exploded.
If there's skepticism or hesitation among American leaders, the terrorists could detonate a second bomb to convince us that they're not bluffing. We would have no way of knowing how many more they have, nor would it matter. The public panic would be unmanageable, and whoever was governing would have to cave to the terrorists' demands.
The real threat, therefore, is not 150 suitcase nukes. The real threat is two or three such devices at the disposal of a suicidal fanatic like the current Iranian president - or, as we've written before, a single warhead detonated high in the atmosphere whose EMP could render useless every electronic device in this country. In a split-second we'd be back in the 19th century and economic and social chaos would reign throughout the land.
These are not happy thoughts, and they lend a certain urgency to attempts to keep nuclear weapons out of the hands of those who despise us enough to blow up most of the world just to kill us.