The joint statement by the leaders came after three hours of talks in Washington on the deepening crisis and warned that unless action is taken now the fighting could sow "the seeds of wider conflict".

No details about the "concrete steps" were provided, but US officials say they expect the withdrawal of Pakistani-backed guerrilla fighters from the Indian side of the line.

As the talks got underway India announced that it had taken the key 4,950m Tiger Hill peak in Kashmir following an all-out assault and a massive artillery bombardment against what it calls Pakistani-backed infiltrators. Militants have disputed India's account of the battle.

Daniel Lak reports from Delhi: "Hailed as an emphatic victory for India"

The Washington statement said that both Mr Sharif and Mr Clinton had agreed that the India-Pakistan negotiations which began in Lahore last February provided the best forum "for resolving all issues, including Kashmir".

"The president said he would take a personal interest in encouraging an expeditious resumption and intensification of those bilateral efforts once the sanctity of the Line of Control has been fully restored," the statement continued.

The BBC's Stephen Sackur in Washington: "These talks lasted longer than expected"

There has not been any official response from Delhi. But the state-run Press Trust of India has described the Washington statement as an "emphatic victory for India", vindicating its position that Pakistan has been at fault in the conflict.

(Click here to see a map of the area)

The US meeting followed several demands by Pakistan for international mediation on the Kashmir issue. Washington has made little secret of its increasing concern over the conflict and has asked both sides to exercise restraint.

India's prime minister Atal Behari Vajpayee has declined an invitation to come to Washington.

Delhi has also ruled out further meetings with Pakistan until the withdrawal of what it says are Pakistani soldiers and militants fighting inside Indian-administered Kashmir.

Militants deny Indian victory

The head of one of the militant groups claiming to be fighting in the Tiger Hill area said that the Indians had not taken complete control of the summit.

Mike Wooldridge: "Capture wouldn't change India's diplomatic position"

Hafiz Saeed said fighters on the ground had told him that India had launched a very heavy attack but fighting was continuing after Indian forces had sustained heavy losses.

But India says that its troops are carrying out mopping up operations on nearby slopes.

George Fernandes, India's defence minister, said the capture meant India would be able to dictate terms to the forces it is attempting to push back.

While Pakistan denies that its own troops are fighting on the Indian side of the Line of Control, an Indian army colonel said his forces had recovered weapons and equipment used by Pakistani regular forces.

Dominating position

Tiger Hill has been one of the highest and most challenging peaks occupied by the infiltrators.

BBC Correspondent Mike Wooldridge reports on what could be a turning point in the conflict

Fighters on the exposed and craggy mountain top have been able to dominate the surrounding terrain, including the Srinagar-Leh national highway.

Shelling of the road has made travelling along it precarious for military convoys as well as civilians.

India reportedly deployed at least three battalions of commandos specially trained in mountain warfare during the assault on the summit.

The final push was apparently delayed partly to minimise Indian casualties.

Indian forces sought to cut off the supply lines to the peak and tackle other occupied positions in the vicinity.