We're so happy that you will be visiting us and celebrating our 60th anniversary year with us. There are virtually endless options of how to see Israel. If you prefer to travel on your own and set your own itinerary you can definitely do that. Using the main cities as your "home base" has many advantages, you can also look into some of the more unique and smaller housing options in the smaller cities, kibbutzim, or moshavim. Information regarding various housing options can be found at: http://goisrael.com/Tourism_Eng/Items/Accommodations.htm.
As to hiring a private driver - that option will allow you to enjoy the scenery and allow you to relax while travelling from one place to another. Another option is hire a licensed tour guide who has a car available and the guide will both drive and guide you at the places you visit. If you prefer to rent a car, take taxis, or get places on your own you can still add the extra benefit of travelling with a guide. Information about licensed tour guides is available at: http://goisrael.com/Tourism_Eng/Tourist+Information/Planning+your+trip/TourGuideSearch.htm.
There are many sites that you can visit on your own. Many historical and archaeological sites, museums, national parks, etc. have excellent explanatory information, signs, markings, and brochures available (in English as well as other languages) to enhance your appreciation and enjoyment of the site.
You can easily find the best fit for your touring style.
Browse through our site, especially the planning section - http://goisrael.com/Tourism_Eng/Tourist+Information/Planning+your+trip/TourGuideSearch.htm - for lots of practical information.
We're waiting to welcome you.