More than 80,000 people in Pakistan and neighbouring India were killed on October 8, 2005 in a 7.6-magnitude earthquake.
General Pervez Musharraf used the memorial service in Muzaffarabad, the capital of Pakistani Kashmir, to call for a resolution of the nearly 60-year-old row with India over Kashmir, a Himalayan territory which both countries hold in part and claim in full.
In the wake of the earthquake, there were hopes that the disaster could help settle the dispute, which has started two of the three wars that India and Pakistan have fought.
"Kashmir is the jugular vein of Pakistan and we will, God willing, move towards a solution," he said.
After the earthquake, the two countries opened crossings for aid on the de facto border separating the two sides, but the initiative failed and had little impact on an overall peace process introduced by Islamabad and New Delhi in 2004.
The 60 seconds of silence at 8.52am (0352 GMT) on Sunday was followed by prayers. Musharraf laid a wreath at a monument to the victims of the earthquake which also left 3.5 million people homeless.
The event took place under heavy security after rockets were found near Musharraf's official residence in the national capital Islamabad earlier this week.
Musharraf told a crowd of more than 1,000: "I praise your courage and resilience. We will always be with you. Those who died cannot be brought back, but I assure you that we will give you a better life.
"I also thank the international community and all the countries that helped us."
Musharraf said he came to Muzaffarabad the day after last year's earthquake and was "stunned to see the devastation".
Musharraf said he was stunned to
see the devastation
"I saw grieved women, elderly people and children. Hospitals had been destroyed, all infrastructure had gone."
Musharraf and Shaukat Aziz, Pakistan's prime minister, are expected to travel throughout the northern Pakistani quake zones on Sunday to attend ceremonies and inaugurate facilities that have been built in the year since the earthquake ravaged cities, towns and mountain villages.
In Islamabad, the Pakistani capital, dozens of relatives and friends of the victims, activists of aid groups and survivors held a candle-lit memorial late on Saturday at the site of the Margalla Towers apartment building that collapsed in the quake, killing 74 people.
On Saturday, more than 1,000 survivors also rallied in Islamabad demanding that officials overcome the delays in the release of compensation so they can rebuild their homes.
Survivors protested against
delays in compensation (File)
Chanting slogans such as, "Stop taking bribes" and "Stop cheating us" and "Build our homes before snowfall," the protesters marched from the parliament building to the government department responsible for releasing aid money for reconstruction.
Musharraf said that his government would ensure the provision of basic facilities to those affected by the quake and that he hoped that 80 per cent of the reconstruction would be over in the coming three years.