"A full scale war between Hezbollah and Israel could be devastating for both parties," Austin said in London after meetings with his UK and Australian counterparts in the AUKUS military alliance.

Austin called on both sides to "choose a different path", saying that "despite the sharp escalation, a diplomatic solution is still viable".

Such an outcome is "the only way to ensure that displaced civilians on both sides of the border can finally go home," he said.

US President Joe Biden and other world leaders have called for an immediate, 21-day ceasefire as Israel pushes forward with its deadly assault on Lebanon. Israel's foreign minister rejected the proposal.

A pause in hostilities would "provide time" for a deal to be struck that would allow Israel and Lebanese civilians to return home, Austin told a news conference after the talks of the trilateral defence partnership.

This time could also be used "to conclude and implement a deal to secure a ceasefire in Gaza and to bring all the hostages home," said Austin.

"We recognise that there's hard work to be done. We are committed to doing that work, and yes, I am optimistic," he added.

Lebanon said Thursday that more than 1,500 people had been killed in almost a year of cross-border violence between Hezbollah and the Israeli army that has spiralled dramatically this week.

According to figures in a statement released by the country's disaster management unit, 1,540 people have been killed, 60 of them in the past 24 hours, and 5,410 wounded in the ongoing hostilities.

Israeli strikes since Monday have killed more than 630 people in Lebanon, according to local health authorities, who say around a quarter were women and children. Several people have been wounded by shrapnel in Israel.

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