#!/usr/bin/perl -w

use strict;

open (FH,'txt');
my $fb=0;
my @str ;
while (my $line = <FH>){
chomp ($line);
if ($line =~ m/Diags begin/){
$fb =1;
}
if ($fb && !($line =~ m/Diags begin/ || $line =~ m/Diags end/ )){
push @str , $line;
}
if ($line =~ m/Diags end/){
my $x = join " ", @str;
print "$x\n";
@str=();
$fb=0;
}
}

Try this

Cheers