Speaking at a press conference in Amman following a meeting with Arab leaders on Saturday, he called for countries across the world to help prevent the Israel-Hamas conflict from spreading into a regional war.
Mr Blinken said the US continues to oppose a ceasefire as it would give Hamas the ability to regroup and launch further deadly attacks.
"It is important to reaffirm Israel's right to defend itself," he said. "It is also very important the way Israel does that.
"Throughout this conflict countries across the world have played an essential role in preventing its spread," the Secretary of State said, adding "all of us have a direct interest in this".
He added: "What we have to do more than anything else is prevent the demonisation of each other. If we don't do that, then we do Hamas's work for it."
Mr Blinken said humanitarian pauses "can be a critical mechanism" to help protect civilians, adding: "Tthe US continues to believe that the sole viable path is a two-state solution with Israelis and Palestinians having a legitimate right to stay in a state of their own."
The top US diplomat said the status quo of a Hamas-controlled Gaza cannot continue and that he hasdiscussed with his Arab counterparts how to chart a better path forward towards a two-state solution.
Mr Blinken is in Jordan on a diplomatic mission to increase humanitarian support for the Gaza Strip. He has met with ministers from Jordan, Egypt, Qatar, UAE and Saudi Arabia as well as a representative of the Palestinian Authority.
It comes as Israeli airstrikes on Gaza continued overnight and struck an ambulance, killing 15 people and injuring 60 others.
Israel's military said it had identified and hit an ambulance "being used by a Hamas terrorist cell".
The Palestinian death toll has now reached at least 9,227 casualties, according to the Hamas-run Health Ministry in Gaza.
Separately, around 90 British nationals are expected to leave the Gaza Strip through the Rafah crossing on Saturday.