Pakistani public opinion strongly opposes US military action
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Pakistan's government says it would be "very difficult" for it to support an attack against Iraq.
But in an address to the nation on Tuesday, Prime Minister Zafarullah Jamali stopped short of explaining how Pakistan would use its vote on a UN Security Council resolution authorising war.
As one of the Security Council's 10 non-permanent members, Pakistan has been under intense pressure to support its key international ally, the US.
But public opinion in Pakistan is strongly opposed to military operations against Iraq, as large-scale demonstrations in many cities have shown.
'Unanimous' decision
Earlier, a senior figure in Mr Jamali's governing PML-Q party said the cabinet had decided to abstain in a vote on a proposed second resolution on Iraq.
"It was a unanimous decision. It is a very positive and principled decision," Senator Mushahid Hussain told the AFP news agency.
"It will clearly demonstrate that the democratically elected government of Pakistan has a policy reflecting the aspirations of the people."
The six-party Islamist coalition, the MMA, which sits in the opposition, led a 200,000-strong anti-war rally on Sunday.
Correspondents say Islamabad is keen to avoid giving the opposition any further opportunity to mobilise opinion against the government.
'Pragmatic choice'
Pakistan has been key US ally in its war against terror since the launch of US-led operations in Afghanistan.
Mr Jamali is sensitive to critics in the parliament and outside
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There has been a groundswell of opinion in the country against President Pervez Musharraf's decision to support the US.
The Islamists have exploited this resentment to secure significant electoral gains, raising their political profile and influence.
Correspondents say Mr Jamali's ruling coalition lacks the majority to ignore its critics in the parliament and on the streets, and an abstention is probably the most pragmatic way ahead for it.
"This decision will be very well received in Pakistan," Mr Hussain said.