Mirwaiz Umar Farooq, the chairman of the All Parties Hurriyat (Freedom) Conference, said: "Kashmir is a complex issue which needs to be resolved in a phased manner."
He was speaking after a trip to Pakistan where he met political leaders and Kashmiri militants.
"We feel the Kashmiri groups should declare a time-bound ceasefire, then India would be asked to do its part of the bargain within that specific period ... say two months, six months," he told a news conference.
A separatist revolt has killed more than 40,000 people since it began in 1989, officials say.
Human rights groups put the toll at about 60,000 dead or missing.
The authorities say fighting has steadily decreased in Kashmir since India and Pakistan, which both claim the region in full and rule it in parts, began a peace process in 2004.
But people are still killed in daily shootouts and occasional grenade attacks.
During his trip, Farooq said he met Pervez Musharraf, the Pakistani president, and urged him to find a political solution to the Kashmir dispute.
Farooq, who is also the most senior Sufi religious figure of Kashmir, has had his residence and office attacked by suspected militants several times since the alliance agreed to peace talks with New Delhi in 2004.
The talks have so far made little progress.
Human rights violations
The Hurriyat leader, whose father and uncle were killed by suspected militants, has been pressing New Delhi for demilitarisation and a complete end to alleged human rights violations by Indian troops in the region.
"A big way could be made with withdrawal of troops. We need to counter India's argument that it cannot withdraw its troops as long as violence continues in Kashmir," he said.
Earlier on Sunday, a suspected separatist was killed when a grenade he was planning to throw at a security patrol exploded in his hand in a crowded street in Indian Kashmir, police said.
Eight other people were wounded in the blast in Anantnag, 55km south of Srinagar, Kashmir's summer capital.