The move was mentioned in a joint statement read by President Pervez Musharraf after talks with Indian Prime Minister Manmohan Singh, their first since Singh became prime minister in a surprise election victory in May.
On Saturday Musharraf and Singh held a one-on-one meeting for just over an hour at the Roosevelt Hotel in New York, where both have been attending the UN General Assembly.
They were later joined by their foreign ministers for expanded talks.
The two leaders had originally planned to issue separate statements and the joint communique was another sign of their efforts to overcome differences.
The statement said the talks were held in a "constructive and frank spirit" and that the nuclear rivals had reaffirmed their commitment to pursue dialogue.
Singh: Today is a historic day
Singh declared: "I sincerely believe today is a historic day. We have made a new beginning."
Kashmir, which is divided between Pakistan and India, has been the cause of two of their three wars since independence from Britain in 1947.
The two also agreed to seek to implement "confidence-building measures" and discussed the possibility of building a gas pipeline running through Pakistan to India.