Musharraf made the appeal on Wednesday as he addressed a convention of 2000 religious scholars and clerics from all Muslim sects from across the country.
The president, who came to power through a military coup in 1999, called upon the participants to promote unity and harmony and to root out sectarian violence.
"We are all Muslims and we should not indulge in highlighting differences between Shia and Sunni Muslim sects. We should not try to impose our views on others," he said.
Condemning religious militancy, he said: "Islam is a religion of peace, it preaches harmony and peaceful co-existence."
Musharraf called upon the clerics and scholars to correct the image abroad that Pakistani society was dominated by "conservative" and "extremist" elements.
"There is an impression being given abroad that Pakistan is involved in terrorism in Afghanistan and was also instrumental in nuclear proliferation.
"The reality is totally opposite and we must take steps to remove this negative impression."
Religious scholars should help the government in dealing with elements promoting violence, he said.
Pakistan had to demonstrate it was a responsible nuclear state, he said, adding that "it has not and will not indulge in proliferation".
"We are all Muslims and we should not indulge in highlighting differences between Shia and Sunni Muslim sects. We should not try to impose our views on others"
Violence between militants from the minority Shia and majority Sunni communities has claimed thousands of lives across the country over the past decade.
Musharraf, a key US ally in the region, himself escaped two assassination attempts in December.
Authorities have arrested more than 500 al-Qaida suspects who fled Afghanistan in the wake of US led attacks that ousted the Taliban government in late 2001.
A majority of the suspects handed over to the United States are in a US detention centre in Cuba.
Moreover, human rights groups have condemned Musharraf for serial abuses since he came to power.
In a recent report, Amnesty International said many of the abuses have been committed in the context of the US-led "war on terrorism".
These include the arbitrary detention of hundreds of people suspected of having links with "terrorist" organisations and their transfer to US custody.
In addition, Amnesty said torture, deaths in custody and extrajudicial killings continued, and abuses against women, children and religious minorities were often ignored.
The rights group said preventive and protective measures to prevent such abuses were non-existent or inadequate.