"We are ready for all possibilities," Nasrallah said during a televised address.
The leader of the Lebanese group was speaking for the first time since the Israel-Hamas war erupted.
He blamed the United States for the war in Gaza and the high civilian death toll and said a de-escalation in the besieged enclave was vital to prevent a regional war.
"Whoever wants to prevent a regional war, and I am talking to the Americans, must quickly halt the aggression on Gaza," Nasrallah said.
He said Hezbollah — a Hamas ally — did not fear the U.S. naval firepower Washington has assembled in the region since the crisis erupted.
"You, the Americans, know very well that if war breaks out in the region, your fleets will be of no use, nor will fighting from the air be of any benefit, and the one who will pay the price will be ... your interests, your soldiers and your fleets," he said.
He added that further escalation along the Lebanese border between Israel and his group was contingent on what happened in the Gaza Strip, under assault by Israeli forces since Hamas attacked Israel four weeks ago.
Hezbollah is a strong military force backed by Iran. The militant group has been engaging Israeli forces along the shared border with Lebanon in the deadliest escalation since it fought a war with Israel in 2006.
In response to Nasrallah's address, a spokesperson for the White House's National Security Council said Hezbollah should abstain from taking advantage of the conflict between Israel and Haas.
The United States does not want to see the conflict expand into Lebanon, the spokesperson said.
On Earlier Friday, U.S. Secretary of State Antony Blinken travelled to Israel where he said Washington had been clear that it is determined there should not be a second or third front in the conflict.
Speaking to reporters in in Tel Aviv following meetings with Israeli leaders, Blinken said the U.S. is committed to deterring aggression from any party.
He also appealed to Israel to take steps to protect civilians in Gaza as its forces kept up their bombardment of the Palestinian enclave and the death toll among residents soared.
Israel has vowed to wipe out Hamas, which rules Gaza, in retaliation for the October 7 attack in which the militant group killed 1,400 people and took more than 240 people hostage.
Gaza health authorities say at least 9,227 people have been killed since Israel started its blitz on the enclave of 2.3 million people.
The Israeli military said its troops were fighting Hamas militants in close-quarter combat in the ruined streets after encircling Gaza City in their bid to wipe out the Islamist group that controls the small, densely populated territory.