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TOYAKO, Japan, July 9 (Reuters) - The G8 remains committed to providing assistance to the Palestinians and helping to strengthen their institutions, Japanese Prime Minister Yasuo Fukuda said at the end of a Group of Eight summit on Wednesday.

Fukuda, in a chairman's statement on the three-day meeting of rich nations, said the G8 had reiterated its full support for the Israeli-Palestinian negotiations with a view to reaching an agreement by the end of the year.

He also called on all parties to refrain from any action that would undermine the talks, citing their obligations under a U.S.-backed peace "road map" that calls on Israel to cease settlement activity and on Palestinians to rein in militants.

"We remain committed to continuing to provide assistance to the Palestinians and helping to strengthen the Palestinian institutions," the statement said.

An international donors conference in December pledged more than $7 billion in aid to the government of Palestinian President Mahmoud Abbas to try to reinforce its authority as it pursues a statehood deal with Israel in U.S.-backed talks.

After a regular follow-up meeting on Monday in Paris to monitor the aid effort, Middle East peace envoy Tony Blair, France and the European Union said Israeli roadblocks in the occupied West Bank and a blockade of the Gaza Strip were hampering economic recovery there.

Israel says its West Bank checkpoints help to prevent Palestinian attacks. It tightened restrictions on the passage of people and goods through Gaza border crossings after Hamas, which opposes Abbas's peace talks with Israel, took over the territory.

The G8 statement welcomed an Egyptian-mediated truce between Israel and Hamas that went into effect on June 19 in the Gaza Strip, territory the Islamist movement seized from Abbas's faction in fighting a year ago.

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