Iran voted against the creation of Israel at the UN but was also the Muslim-majority country to recognize Israe, but until two years after the creation of Israel, since at the time there was concern that Israel was too close to the Soviets and the Shah waited for Israel to clarify its stance in the Cold War. So in 1951 Israel received de facto recognition but not de jure recognition.

Israel's creation also stirred Arab Nationalism, which Iran considered a threat too esp since Nasser has courted the Soviets, so basically Iran found itself allied with Israel against Soviet-backed Arabs.

Iran and Israel had strong commercial and diplomatic ties -- Israel still owes Iran $1.1 billion for oil http://www.richardsilverstein.com/2015/05/21/swiss-court-rules-israel-owes-iran-1-1-billion-from-oil-dispute/ This oil was sent to Israel via a special pipeline that was created after the 1956 war after which the Arabs refused to sell oil to Israel, and it benefited Iran by allowing Iranian oil to avoid Suez and Naser who had been making claims on Iran's Arab-settled regions.

Diplomatic relations ended in 1979. The current govt of Iran says it can recognize Israel again once the Palestinian issue is resolved http://world.time.com/2014/02/04/iranian-foreign-minister-lays-out-condition-for-iranian-recognition-of-israel/

This book is all about Israeli-Iranian relations Treacherous Alliance: The Secret Dealings of Israel, Iran, and the United States http://www.amazon.com/Treacherous-Alliance-Secret-Dealings-Israel/dp/0300143117 By Trita Parsi