In DES, does the s-box provide an avalanche effect or does it only provide confusion in the ciphertext?
Yes, in DES, S-boxes are the main contributors to diffusion and hence to the avalanche effect, because changing 1 input bit from an S-box has the potential to change up to 4 output bits. Another contributor is the expansion E, because 16 out of its 32 inputs have effect on 2 outputs (the 16 others provide no diffusion).
Another way to look at it is that thru the combination of E and the 8 S-boxes, 16 out of the 32 bits of one half of the state can each influence up to 8 bits of the other half; and 16 others can each influence up to 4 bits.
Permutation P does not in itself provide diffusion, but the way it permutes bits insures that the diffusion of E and the 8 S-boxes quickly spreads to the whole state in few rounds; that is, that the diffusion is about exponential; which is, the avalanche effect.
Well it goes a long way towards it. If you simply consider an S box on it's own, you'll virtually have the avalanche effect across it. Even with a randomly permuted one. This is just a function of the input /output non linearity.
The 100% avalanche effect is brought on by DES' S box in conjunction with other components such as permutations and xor operators on the outputs of these, as in the points where the 48 bit subkeys are mixed in. The number of rounds is also important. Generally, there is a relationship between the width of the S boxes, the number of adjacent s boxes and the number of rounds. It's entirely possible that without enough rounds, you might only get say 90% of avalanche effect.
It's easier to describe the avalanche effect itself, rather than the required steps to provide it. That's why testing is crucial to confirm that a primitive has it. You can have a pretty good suspicion that a construct might exhibit avalanche effect, but you won't be able to confirm it without testing.
S-Box Modifications and Their Effect in DES-like Encryption Systems is a good article on the DES S boxes and messing with them. Specifically look to section 4.2 regarding DES box 5.