The G statement welcomed the Israeli government's recent plan to partially easethe blockade, and called for it to be put in place immediately.
The leaders urged the Israelis and Palestinians to create conditions conducive to direct peace talks.
"We urge full and effective implementation of this policy in order to address the needs of Gaza's population for humanitarian and commercial goods, civilian reconstruction and infrastructure, and legitimate economic activity," the final communique said.
Ship's sinking deplored
The leaders of the US, Canada, France, Germany, Britain, Italy, Japan and Russia issued their statement as they wrapped up meetings at a resort in Muskoka in the province of Ontario.
They strongly condemned the sinking of a South Korean navy ship blamed on North Korea.
"We deplore the attack on March 26 that caused the sinking of the Republic of Korea's naval vessel, the Cheonan,resulting in tragic loss of 46 lives," the G8 final communique said.
"Such an incident is a challenge to peace and security in the region and beyond.
|The G8 leaders called the Israeli blockade of Gaza 'unsustainable' in a communique [AFP]
"We condemn, in this context, the attack which led to the sinking of the Cheonan. We demand that the Democratic People's Republic of Korea refrain from committing any attacks or threatening hostilities against the Republic of Korea," the communique said.
The eight leaders expressed grave concerns for the nuclear ambitions of North Korea as well as Iran.
The G8 demanded North Korea "abandon all nuclear weapons and existing nuclear and ballistic missile programmes, as well as proliferation activities, in a complete, verifiable and irreversible manner".
The communique called for Iran to hold a "transparant dialogue" over its controversial nuclear enrichment programme.
"We are profoundly concerned by Iran's continued lack of transparency regarding its nuclear activities and its stated intention to continue and expand enriching uranium.
"Our goal is to persuade Iran's leaders to engage in a transparent dialogue about its nuclear activities and to meet Iran's international obligations," the leaders said.
The leaders also noted efforts by Turkey and Brazil to broker a deal with Iran over its nuclear programme.
On Afghanistan, the G8 leaders said that Afghan government forces must make progress towards assuming more responsibilty for the security of the country "within five years".
They also called on the Afghan government to "combat corruption, address illicit drug production and trafficking, improve human rights, improve provision of basic services and governance and make concrete progress to reinforce the formal justice system".
The leaders also praised the new Start treaty between the US and Russiathat is intended to reduce nuclear weapons.
|The G8 noted Brazil's efforts to engage Iran over Tehran's nuclear programme [AFP]
"We call upon all other states, in particular those possessing nuclear weapons, to join these disarmament efforts, in order to promote international stability and undiminished security for all," they said.
They addressed one more issue that they said undermined stability in Latin America, the Caribbean and Africa: maritime piracy and growing links between criminal and "terrorist" networks.
The talks were held as protesters, who have become a hallmark of the global meetings, clashed with police in riot gear in downtown Toronto.
Police arrested at least 180 protesters on Saturday outside the G20 summit. In addition to at least 32 arrests made on Friday.
A small group of demonstrators broke away from a peaceful gathering and broke windows of several businesses, including a bank and a Starbucks, and set at least two police cars on fire.
Toronto police admit they struggled to contain the violence. No major injures have been reported.
G8 leaders will now meet delegates from emerging economies including India, China and Brazil in a broader G20 summit in Toronto.
The G8 leaders also addressed the economic challenges facing the world, warning that the recovery was still fragile and that the economic crisis had compromised Millenium Development Goals set by the UN.
"The crisis has jeopardised advancement toward meeting some of the 2015 targets. Renewed mutual commitments are required," their communique said, warning that "both developed and developing countries must do more".
The Millennium Development Goals were agreed by UN member states as a list of human development targets due to be met by 2015, reducing poverty and hunger, boosting women and children's rights and improving education.
The statement came a day after the G8 pledged $5bn in aid over five years to reduce deaths among mothers and newborn children in Africa. That amount is nowhere near the ambitious promise from five years ago to double aid by up to $50 bn by 2010.
The G8 summit now morphs into a larger G20 meeting that will include leaders from the emerging economies.
Discussions at the G20 summit are expected to be dominated by contentious economic issues, particularly over whether to cut or spend their way to economic recovery.
Al Jazeera's Imtiaz Tyab, reporting from Toronto, said that economic divisions would dominate the meeting.
"What we can expect from this larger grouping is whether they can get past their divisions. When it comes to global finances we are seeing a big split, particularly between the US and Europe," he said.
The US supports continued economic stimulus spending to galvanise the recovery, but European countries are facing a sovereign debt crisis that is squeezing national budgets and prompting governments to make severe cuts in spending.