The understanding was reached by Pakistani and Indian armies on Tuesday after reviewing a spike in violence along the Line of Control since September 2016.
The Line of Control is a de facto border that divides the disputed Kashmir Valley between the two countries and the Working Boundary, which separates the two neighbours.
“Both director generals of military operations reviewed the prevailing situation along the Line of Control and the Working Boundary and mutually agreed to undertake sincere measures to improve the existing situation ensuring peace and avoidance of hardships to the civilians along the borders,” a statement from Pakistan army’s media wing said.
The two sides also agreed to “fully implement the ceasefire understanding of 2003 in letter and spirit forthwith and to ensure that henceforth the ceasefire will not be violated by both sides,” said the statement.
In case of any issue, restraint would be exercised and the matter would be resolved through utilisation of existing mechanisms of hotline contacts and border flag meetings at local commander’s level, the statement added.
Tensions between the two nuclear neighbours have failed to ease after 19 Indian soldiers were killed in Indian-administered Kashmir in September 2016 by an armed group India has claimed to have links with Pakistan.
Since then, over 150 civilians and troops from both sides have been killed in border clashes.
According to India’s Ministry of Home Affairs (MHA) records. more than 1,250 ceasefire violations have been recorded in the first five months of this year, compared to 971 such violations in 2017, 449 in 2016, and 405 in 2015.
Kashmir, a Muslim-majority Himalayan region, is held by India and Pakistan in parts and claimed by both in full.
The two countries have fought three wars – in 1948, 1965 and 1971 – since they were partitioned in 1947, two of which were fought over Kashmir.
Also, in Siachen glacier in northern Kashmir, Indian and Pakistani troops have fought intermittently since 1984. A ceasefire came into effect in 2003.
Some Kashmiri groups in Jammu and Kashmir have been fighting against Indian rule for independence, or for unification with Pakistan.
According to several human rights organisations, thousands of people have reportedly been killed in the conflict in the region since 1989.