The world powers should do so as India and Pakistan both were nuclear powers and the region was a nuclear flash point, he told reporters in London on way to Washington, according to the Associated Press of Pakistan.
The two countries were engaged in an arms race for 60 years, Sharif was quoted as saying.
"The situation can become dangerous. India has nuclear bomb, so do we; India develops missiles, so do we. There should be a limit to it. We all should think about it," he said
Sharif said that during his July 1999 visit to the US after the Kargil incident, he had clearly told then president Bill Clinton that if the US intervened, the Kashmir issue could be resolved.
"I told him if he spends 10 percent of the time he was spending on (the) Middle East, the Kashmir issue between (the) two countries would resolve," he was quoted as saying. Clinton, Sharif said, promised, but then things changed.
The US has adopted a hands-off policy on Kashmir and time and again made it clear that while it encouraged a dialogue between the two countries "the pace, scope, and character of India and Pakistan's dialogue on Kashmir is for those two countries to determine with each other".
During his meeting last month with Nawaz Sharif in New York as also in his address to the UN general assembly, Indian Prime Minister Manmohan Singh too had served a stern warning to its neighbour to shun terrorism to make peace.
Reasserting what he had told Obama at his summit about Pakistan being the "epicentre of terrorism", Manmohan Singh had told world leaders that little progress could be expected in peace talks with Islamabad without a shutdown of Pakistan's "terrorist machinery".
"India is committed sincerely to resolving all issues with Pakistan, including the issue of Jammu and Kashmir, through bilateral dialogue on the basis of the Simla Agreement," he then said.
"However, for progress to be made, it is imperative that the territory of Pakistan and the areas under its control are not utilised for aiding and abetting terrorism directed against India," Manmohan Singh said.
The issue of terrorism is expected to figure prominently during Obama-Sharif meeting here Wednesday.
Meanwhile, the US has quietly decided to release more than $1.6 billion in military and economic aid to Pakistan that had been blocked because of tensions between the two nations over events, including the Navy SEAL raid in which Osama bin Laden was killed inside Pakistan.
Setting the tone for the Obama-Sharif session, the White House has said that the meeting would highlight the "resilience of the US-Pakistan relationship" and further cooperation on trade and economic development, regional stability and the fight against extremism.
Sharif will also meet Secretary of State John Kerry Sunday before the latter leaves on a foreign trip.