Do I call their bluff if they are practically blackmailing me?

I would not worry about it, if I were you I would call her on it cause what you are not thinking about is the fact that she had these pics for a very long time and will make her look just as bad as she. if she wasn't going to use them against you she would have spilled the beans a long time ago. so i say look her right in the eye and call her on it