The missiles Iran is using have guidance systems that make these missiles of very little use if the warhead is a conventional warhead, because a conventional warhead does damage that's limited to the tens of metres or perhaps, possibly, the hundreds of metres. However, when it comes to nuclear weapons, then an accuracy of a couple of kilometres is good enough. And while Tel Aviv is small, even if you miss by a few kilometres, you can still do a tremendous amount of damage.
The accuracy of the missile that Iran has been testing is such that more than half of the missiles would fall within a circle of somewhere between two and three kilometres.