National Security Advisor Sartaj Aziz and Kerry addressed a joint press conference here after talks which were part of the bilateral Strategic Dialogue.
Aziz said that the cancellation of last year's scheduled talks over meeting with Kashmiri leaders shows that India was not interested to talk on this issue.
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Kerry said US would continue to encourage the two sides to move forward and hold dialogue to resolve the issue.
He also voiced concern over the border tension between the two neighbours.
"We continue to be deeply concerned by the recent spate of increased violence along the working boundary and the Line of Control," Kerry said.
"It is profoundly in the interests of Pakistan and India to move this relationship forward," he added.
Aziz claimed that India was involved in unprovoked firing across the border.
The two sides in the dialogue also discussed the relations between Pakistan and India.
India called off Foreign Secretary-level talks with Pakistan in August last year after Pakistan High Commissioner in New Delhi Abdul Basit held talks with Kashmiri separatists.
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