"I urge both India and Pakistan to exercise restraint so that there's no further escalation of tension We want the people of South Asia not to suffer," she said.
The Prime Minister made the remarks while delivering her 32-minute winding up speech of the 12th session of the 10th Parliament on Thursday evening.
Hasina said her government always desired peace in South Asia.
"We never want to see any conflict and tension created in this region If any such conflict is created, then Bangladesh will also be affected," the Daily Star quoted her as saying.
Tensions between the two countries have grown since a terror attack on an Indian army camp in Jammu and Kashmir on September 18 left 19 soldiers dead. India blamed the attack on militants from Pakistan. India launched surgical strikes on terrorist launch pads in Pakistan-administered Kashmir.
India, Bangladesh, Bhutan, Afghanistan and Sri Lanka last week pulled out of the Saarc summit that was to be held in Islamabad in November, leading to its cancellation.