The remarks by Austin come after Israel claimed on Tuesday (local time) to have killed the Hezbollah commander who it said was behind a deadly strike in the Israeli-occupied Golan Heights. They also follow the killing of Hamas leader Ismail Haniyeh in Iran today.
"I don't think war is inevitable. I maintain that. I think there's always room and opportunities for diplomacy," Austin told reporters during a visit to the Philippines.
"What we have seen along the border, northern border, with Israel over time that's been a concern of ours.
"Again, We are going to give everything we can to make sure that we keep things from turning in to a broader conflict throughout the region."
Asked also if he could confirm details about the killing of Haniyeh, Austin said: "I don't have any additional information to provide".
Iran's Revolutionary Guards confirmed the death of Haniyeh, hours after he attended a swearing in ceremony for Iran's new president, and said it was investigating.
Palestinian militant group Hamas called the strike a "severe escalation" that would not achieve its goals.
Hezbollah and Israel last fought each other in a major war in 2006 but have been trading fire since the eruption of the Gaza war in October after Hezbollah began firing at Israeli targets in what it says is solidarity with the Palestinians.
DIPLOMATIC APPROACH
Asked what assistance the United States would provide if a wider conflict should break out in the Middle East, Austin said Washington would continue to help defend Israel if it were attacked, but the priority was de-escalating tensions.
"We certainly will help defend Israel. You saw us do that April. You can expect to see us do that again," he said.
"We don't want to see any of that happen. We're going to work hard to make sure that we're doing things to help take the temperature down and address issues through diplomatic gatherings."
Austin was also asked about the impacts of an escalation on US troops in Iraq and Syria, after US officials confirmed an air strike was carried out in Musayib, located in Iraq's Babil province.
The strike targeted militants the US deemed were seeking to launch drones and posed a threat to US and coalition forces.
"The safety and protection of troops is really important to me that is why you saw us take measures to protect ourselves here and we took out some UAVs (unmanned aerial vehicle) which are about to be launched," he said.
"We have the right to do that and continue to do that to protect our troops."
Austin said the United States was concerned also about advances by Russia in Ukraine, to which US security assistance would continue. He said he was encouraged by Ukraine's ability to recruit more people to beef-up its own ranks.
"I applaud what the Ukrainians continue to do to make sure that they can hold their own," he said. "The Ukrainians are very determined people."
