"Pakistan will continue to respond to the situation with restraint and responsibility in the hope that steps would be taken by India to help reduce tensions," Sharif said at a joint news conference with United Nations chief Ban Ki Moon.
"We have to defuse tension and de-escalate the situation. Our objective is peace. For that, what we need is more diplomacy," he said.
Tensions between India and Pakistan have spiked due to clashes along the Line of Control since five Indian soldiers were killed in an attack by the Pakistan Army on August 6.
Pakistan today claimed a man was killed and his daughter injured in firing by Indian forces in Rawalakot sector. This was the second civilian death reported from the Pakistani side of the LoC.
Following his talks with the visiting UN chief, Sharif said, "The escalation of tensions along the LoC is a matter of concern for us and the Secretary-General."
Sharif said he would "explore all avenues to ease tension with India, start dialogue, address outstanding issues including Jammu and Kashmir, and promote trade and commerce".
He reminded Ban that the Kashmir dispute is the "longest outstanding issue on the UN agenda".
Pakistan seeks a "just and peaceful resolution of the Kashmir dispute in accordance with the UN resolutions," he said.
"We hope that the UN will play its due role in resolving the Kashmir dispute," Sharif said.
Ban said, "I wholeheartedly welcome your efforts to tackle serious challenges and to form and strengthen relations with your neighbours."
The latest clashes have strained the ceasefire put in place along the LoC in November 2003. The bilateral dialogue process was put on hold after an Indian soldier was beheaded and another soldier's mutilated body was found following an attack by Pakistani troops on the LoC on January 8.
Fresh tensions have dimmed prospects of an early revival of the peace process but efforts are being made for a meeting of the two prime ministers on the sidelines of the United Nations General Assembly in New York in September.
Image: Pakistan Prime Minister Nawaz Sharif with United Nations Secretary General Ban Ki Moon in Islamabad ' Photograph: Faisal Mahmood/Reuters
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