Its already maximally bad. Both sides have been doing everything in their power to destroy the other. From isreal it looked like they weren't doing anything to Iran directly but we can see now they were setting up for this operation for the past 4 years at least. So yeah it can't any worse unless isreal uses its nukes, Iran develops and uses a nuke or another major power joins the fray which are all very unlikely (us is already involved another major power would be russia, China, India, Pakistan)

I think this can lead to a good outcome. If Iran has a democratic election and elects a leader who isnt a religious extremist they can liberalise. If that happens isreal would also need to make massive concessions and chill the fuck out. The end needs to be a Palestinian state.