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The Foreign Office also said that Kashmir has been on the agenda of the UN Security Council as a 'disputed territory'.
Pakistan is ready to review its decision against India, including downgrading of diplomatic ties, if New Delhi agreed to reconsider its actions on Kashmir, Foreign Minister Shah Mehmood Qureshi said on Thursday.
Qureshi's remarks came a day after Pakistan expelled the Indian High Commissioner and also announced that it will review all 'bilateral arrangements' with India, which urged Islamabad to reconsider its decision.
"Are they (India) ready to review their decisions? If they do, we can also review our decisions. Review will be on both sides. That is what Simla (agreement) says," Qureshi told reporters.
The Ministry of External Affairs in New Delhi on Thursday said India regretted the steps announced by Pakistan on Wednesday and asserted that its decision on Jammu and Kashmir is an internal affair.
India on Monday revoked Article 370 of the Constitution removing special status to Jammu and Kashmir, and has also bifurcated the state into two Union Territories -- Jammu and Kashmir, and Ladakh.
Pakistan described the Indian action as 'unilateral and illegal'.
Qureshi said that Pakistan has decided to go back to the United Nations Security Council to challenge the Indian decision.
"Pakistan is not looking at the military option. We are rather looking at political, diplomatic, and legal options to deal with the prevailing situation," he said.
He also replied in the affirmative when asked about reducing the strength of diplomatic staff and restricting their movement. However, he did not elaborate on the issue as to how they will do it.
He also said Pakistan will legally examine the Simla agreement.
The Simla agreement signed by then Prime Minister Indira Gandhi and then Pakistan President Zulfikar Ali Bhutto in July 1972 was a comprehensive blue print for good neighbourly relations between India and Pakistan.
The bilateral agreements with India would be reviewed by the special committee set up by the Prime Minister, he said. However, he did not specify which of the agreements would be reviewed.
Rejecting India's assertion that Kashmir was its internal matter, Qureshi referred to India's first Prime Minister Jawaharlal Nehru and said, "Nehru announced on 14 occasions" that "future of Kashmir will be decided by the goodwill and pleasure of Kashmiri people."
Qureshi said that Pakistan would take the issue of Kashmir to the UN Security Council. He said that he would go to China soon to consult on the recent developments in the region.
Foreign Office Spokesperson Muhammad Faisal at his weekly media briefing said that Kashmir has been on the agenda of the UN Security Council as a 'disputed territory' as he rejected India's contention that Jammu and Kashmir is its internal matter.
"No unilateral step by the Indian government can change this internationally accepted disputed area as enshrined in the United Nations Security Council resolution nor will this ever be acceptable to the people of Jammu and Kashmir and of Pakistan," Faisal said.
He also said Pakistan Attorney General was exploring the proposal to take the Kashmir issue to the International Court of Justice.
Earlier, Pakistan Railways Minister Sheikh Rashid Ahmed announced that the Samjhauta Express train service with India has been suspended.
"Till I am Railways minister, Samjhauta Express train service will not operate," he said. Ahmed, however, did not elaborate the date when the train links will be snapped.
The foreign minister also said that news reports about closure of Pakistani airspace was not true. "Pakistan has not closed airspace…," he said.
Pakistan's Civil Aviation Authority spokesperson Mujtaba Baig told PTI that there has been no change to the notice to airmen (NOTAM) and all flights are being operated as per schedule issued earlier.
"Pakistan has neither closed its airspace for India nor re-routed or closed down any route for the Indian flights," Baig said.
Responding to a question about re-routing of a few routes as reported by the media, he said: "Not a single route has been re-routed after the latest tension between the two countries."
Qureshi also said that Pakistan remains committed to complete the Kartarpur corridor despite its decision to downgrade the diplomatic ties with New Delhi.
"Our commitment on Kartarpur stands. We respect all religions and will not create hurdles in people-to-people to contacts," he said.
Pakistan also banned screening of Indian movies in the country.
"No Indian cinema will be screened in Pakistan. Drama, films and such content from India will be completely banned in Pakistan," PM's Special Advisor for Information and Broadcasting Firdous Ashiq Awan said.
There was also uncertainty over next month's Davis Cup match in Islamabad, with India's national tennis association planning to approach the International Tennis Federation for a neutral venue.
India's two-day tie against Pakistan is scheduled to begin in the Pakistan capital on September 14.
Qureshi also clarified that Afghan trade will not be damaged due to Pakistan's action against India.
He said Pakistan never shied away from talks with India. "Pakistan welcomes any effort by the international community to arrange talks between Pakistan and India," he said.
He also rejected the media reports that Pakistan was complicit with the US in the recent developments in Kashmir and said US has already declared that India did not inform it about its Kashmir move.
Qureshi said Pakistan was vigilant and would take safeguards needed for security.