Before leaving Delhi, Mr Vajpayee told reporters he would give "serious consideration" to talks only if there was evidence that General Musharraf was acting on his pledge to stop cross-border activities by Islamic militants in Kashmir.
Russia's President Putin, who is also attending the summit, has been trying to arrange the meeting between the leaders of the two nuclear-capable countries.
Mr Putin's initiative is part of intense international efforts to end a military stand-off over the disputed region of Kashmir.
But hopes that talks might be held on the fringes of the conference were dashed by India's ambassador to Kazakhstan.
"There will be no talks at any level," said Vidya Sagar Verma. "It is not a forum to discuss India-Pakistan issues."
And Indian Defence Minister George Fernandes told the BBC there would be no talks until cross-border attacks in Kashmir which India blames on Pakistan ended and suspects wanted by India were handed over.
Pakistan's General Musharraf, however, has been pushing for dialogue at the conference in the Kazakh capital, Almaty.
BBC Delhi correspondent Jill McGivering says India may be wary of any theatrical gestures from General Musharraf which could leave Mr Vajpayee feeling upstaged.
Last January, when tensions between the two were also running high, the Pakistani president used a regional summit to dramatic effect - heartily shaking the Indian leader's hand in front of the cameras - winning, according to Delhi, a victory in the media war.
The United States is also stepping up diplomatic pressure by sending Defence Secretary Donald Rumsfeld to the region next week.
The latest diplomatic initiatives come amid continuing violence in Kashmir, where attacks on the Indian side of the Line of Control have left one person dead and about 50 injured since Friday.
On the Pakistani side, the authorities said at least two people, including an eight-year-old boy, had been killed by Indian shelling.
Nuclear war 'unthinkable'
With diplomatic moves so far failing to achieve negotiations over the Kashmir stand-off, foreign nationals and non-essential diplomatic staff from many countries are leaving India and Pakistan.
Rising tension:
1 October 2001:
38 killed in attack on the Kashmir assembly in Srinagar
13 December 2001:
14 killed in attack on the Indian parliament building in Delhi
14 May 2002:
More than 30 killed in attack on an Indian army camp in Kashmir
21 May 2002:
Moderate Kashmiri politician Abdul Ghani Lone shot dead
The UK, the US and Saudi Arabia are among the many countries to have advised their citizens to leave the region, fearing a military confrontation.
On Sunday, Kuwait also advised its citizens not to travel to the region, while Malaysia urged families of diplomats and its non-essential embassy staff to leave India and Pakistan.
The UN began the evacuation of the dependants of its foreign staff from Pakistan on Sunday. Similar moves are expected to get under way in India in coming days.
On Saturday, General Musharraf played down fears of a nuclear war with India, saying he did not believe either side would fire its missiles.
"I don't think either side is that irresponsible to go to that limit," he told CNN.
"I would even go to the extent of saying one shouldn't even be discussing these things, because any sane individual cannot even think of going into this unconventional war, whatever the pressures," the Pakistani leader said.
The Indian defence minister agreed it was unlikely that Pakistan would use its nuclear arsenal and indicated a military strike from India was not imminent.
"It's difficult to specify in what circumstances you need a war. At the moment, I don't see any situation in which that may become necessary," Mr Fernandes said.
He also ruled out the first-use of nuclear weapons by India.
About one million soldiers are massed on either side of the Line of Control which divides Kashmir between Pakistan and India.
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