Midnight Mass on Christmas is an old tradition, based on the belief that Christ was born at midnight.  We really don't know the time of his birth, but the origins of this tradition may lie in a passage from Wisdom (18:14-15): 

For when peaceful stillness compassed everything and the night in its swift course was half spent, your all-powerful word leaped from heaven . . . 

In the early Church, midnight was not assigned as the precise time for the first Christmas Mass.  It was simply to be celebrated "during the night."  Later regulations said it was to be "ad galli cantum" ("when the rooster crows"), which was more towards 3 AM.  Spanish-speaking people still refer to the midnight or early morning Christmas Mass as the "Misa de Gallo" ("Mass of the Rooster"). 

Since about the end of the first millennium, the custom developed of celebrating three Masses, beginning at midnight. 

The first was called the "Mass of the Angels" because the Gospel was from Luke's account of the angel's announcement to the shepherds. 

The second was called the "Shepherd's Mass" because the Gospel was the account of the shepherds' visit to the manger. 

The third was called the "Mass of the Divine Word" because the Gospel was from the prologue of John -- "And the Word became flesh . . ." 


SOURCE: The Little Blue Book: Advent and Christmas Seasons 2019-2020, 12/24/2019.

The simple answer to your question would be no. The targeted nation could not simply retaliate in kind, and certainly not seek to obliterate the offending nation. 
 
Some sort of military response might well be called for, even full-scale war. This would presume that the criteria for just war have been met. Namely, that the damage and threat was grave, lasting and certain (which would be the case in your scenario), that other means of ending the conflict has been tried or were not possible, that there is a reasonable hope of success in turning back the threat by military means, and the use of arms must not produce evils and disorders graver than the evil to be eliminated (cf Catechism #2309). 
 
Even once within a war, a nation must use means to distinguish between combatants and noncombatants. Hence, choosing to wipe out whole population centers, indiscriminately killing combatants and noncombatants, is not a moral option. Indiscriminate obliteration cannot be condoned under any circumstances. (cf Catechism #2314). 
 
It will be admitted, given the existence of large-scale nuclear devices, the most effective means to deter such attacks is complex and debatable. A short answer such as this cannot possibly explore all the points debated in the deterrence of nuclear threat. Simply here let it be noted that the Catechism expresses strong moral reservations regarding the modern “arms race” (cf Catechism #2315). 
 
Thus, to return to the main question, if a nation were lamentably to be attacked by a country in the way you describe, that nation is not thereby justified in indiscriminately retaliating by wiping out whole cities or in annihilating that country.