"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 UN 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.
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.
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