There are different kinds of internal combustion engines. Diesel engines are one form and gas turbine engines are another. See also the articles on HEMI engines, rotary engines and two-stroke engines. Each has its own advantages and disadvantages.
There is such a thing as an external combustion engine. A steam engine in old-fashioned trains and steam boats is the best example of an external combustion engine. The fuel (coal, wood, oil, whatever) in a steam engine burns outside the engine to create steam, and the steam creates motion inside the engine. Internal combustion is a lot more efficient (takes less fuel per mile) than external combustion, plus an internal combustion engine is a lot smaller than an equivalent external combustion engine. This explains why we don't see any cars from Ford and GM using steam engines.