Are there different difficulty settings?

Solution 1:

No, there's no way to select a difficulty level in the game. You're right, the combat is not that difficult, especially when you get used to using counter-kills and are good at blocking But later on you will be facing more enemies at a time and every time you make a mistake you will lose health, so you do have to be careful. I can't remember ever actually dying in combat, though.

I don't remember about the first game, but there is also no difficulty selection in Assassin's Creed: Brotherhood (the 3rd in the series).

Solution 2:

you want higher difficulty, just try to finish the target without actually killing or alerting any other guard as much as possible... thts all about difficulty is AC2..