Yes, OSPF can authenticate all packets exchanged between neighbors. Authentication may be through simple passwords or through MD5 cryptographic checksums. To configure simple password authentication for an area, use the command ip ospf authentication-key to assign a password of up to eight octets to each interface attached to the area. Then, issue the area x authentication command to the OSPF router configuration to enable authentication. (In the command, x is the area number.)
Cisco IOS Software Release 12.x also supports the enabling of authentication on a per-interface basis. If you want to enable authentication on some interfaces only, or if you want different authentication methods on different interfaces that belong to the same area, use the ip ospf authentication interface mode command.