"We had extensive exchange of views on the situation in West Asia and the Middle East peace process," Modi said while jointly addressing the media with Abbas following the delegation-level talks here.
"We agreed that the challenges in West Asia must be addressed through sustained political dialogue and peaceful means," he said.
"India hopes for early resumption of talks between Palestinian and Israeli sides to move towards finding a comprehensive resolution."
Modi said India has been "unwavering in its support of the Palestinian cause".
"And, we hope to see the realisation of a sovereign, independent, united and viable Palestine, co-existing peacefully with Israel," he said, ahead of his visit to Israel scheduled for July this year.
"We will continue to support the development and capacity-building efforts of Palestine," he said.
The Prime Minister said the five agreements signed following Tuesday's talks "are reaffirmation of our intent to strengthen cooperation in this direction".
The agreements signed include cooperation in the areas of agriculture, IT and electronics, health and youth affairs and sports.
Modi also referred to a flagship Techno-park project India was undertaking in Ramallah and said particular emphasis was being laid on the areas of information technology, youth and skills development.
He also called for enhancing cultural exchanges between the two sides and sought the participation of the Palestinian people in the International Yoga Day to be observed next month.
On his part, Abbas expressed his appreciation for India's continued support and solidarity for the Palestinian cause on international forums.
He said he updated Modi on his meeting with US President Donald Trump regarding the Middle East peace process and his talks with his German and Russian counterparts Frank-Walter Steinmeier and Vladimir Putin, respectively, on the issue.
Abbas also condemned terrorism in all its forms and manifestations and voiced support for all regional and international efforts to fight this menace.
Earlier in the day, Abbas was accorded a ceremonial welcome at Rashtrapati Bhavan here following which he paid tribute to Mahatma Gandhi at Rajghat.
External Affairs Minister Sushma Swaraj called on the visiting dignitary and discussed issues of bilateral interest.
He is being accompanied by a delegation comprising Palestinian Deputy Prime Minister Ziad Abu Amr, Foreign Minister Riad Malki, Diplomatic Advisor Majdi Khaldi, Presidency Spokesperson Nabil Aburdeineh and Palestine's Chief Judge Mahmoud Habbash.