Pakistan should do nothing more than what it is doing right now because the only thing that will make a difference on the ground is what goes on behind the scenes/covertly. Modi/India have played their card and in their minds this is a masterstroke. Let this play out and then one can objectively decide how good/bad this step will be for either country.
One thing for sure, the problem is far from resolved and while Pakistan may have been going easy on pushing some buttons, the gloves will come off no matter what the Indians do because there is no way that Pakistan will let this internationally recognized issue go by the wayside, regardless of the Amreekis, Khaleejis or Cheeni weighing-in or not.
Those suggesting that we have no friends to support us need to realize that Pakistani foreign policy has weathered far worse situations with regards to Kashmir in the past with no material support from anyone. OIC and the likes don't change situation on the ground. That change is affected through Pakistani support of Kashmiris which will continue unabated and may even be ratcheted up. If we think our economy is a mess and that we don't have friends, we need to look no further than Iran and Turkey. When their core interests are at stake, they are willing to be the most sanctioned of the sanctioned, and they are willing to take on the Russians and get into a shooting war and they are willing to forego F-35s among other things. This is the kind of stuff that real nations are made of. I am not proposing we go to war here but I see this wretched excuse being made to sit this one out on the pretext of "our economy is not good".
Indians will try to ape Gaza/West Bank in the Kashmir Valley but like with Israel, there is no surety of pervasive security and also this recipe will not work due to the geographical dynamics involved. Unlike Gaza/West Bank, IoK cannot be bottled up and fortunately for the Kashmiris, they are not all alone without support. They will get moral, financial and other support from Pakistan.
Lastly, Pakistan's Kashmir policy is an amalgamation of all the leaders and their policies on Kashmir. One cannot single out any one individual because there has been consistency in the Kashmir policy and its fundamental goals remain the same.
This is a game of chess. They have made their move, now Pakistan will re-calibrate its response and while we may not see an immediate response, there will be changes forthcoming overtly and otherwise.