From SourceTree, click on Tools->Options. Then on the "General" tab, make sure to check the box to allow SourceTree to modify your Git config files.
Then switch to the "Diff" tab. On the lower half, use the drop down to select the external program you want to use to do the diffs and merging. I've installed KDiff3 and like it well enough. When you're done, click OK.
Now when there is a merge, you can go under Actions->Resolve Conflicts->Launch External Merge Tool.