Both the leaders said that the document would also be presented to other political parties at the ARD meeting, to be held on July 2, to achieve general consensus.
Talking to newsmen after the signing, Benazir and Nawaz Sharif termed the moment "historic" for the country. They also exchanged their pens as a "memento". Both the leaders agreed that next elections should not be held under the present government and that these elections must be free and fair.
They said that Pakistan Peoples Party (PPP) and Pakistan Muslim League (PML-N) were united and have identical views on all issues.
The meeting took place at Rehman Malik's residence in London, where other leaders from both the parties were also present.
Benazir Bhutto and Nawaz Sharif said that they would like to return to country jointly, but declined on giving any specific date of their return.
PROTEST: On the other hand few students protested against both the exiled leaders outside the meeting venue and a scuffle broke out between protestors and supporters of the two parties.
REACTION: Mohammed Ali Durrani, minister of information reacting on the news said that it is an artificial alliance and there is nothing new in it.
He added that in the past they were blaming each other but now getting united for their vested interests.