LONDON — Secretary of State John Kerry said Sunday that he had asked the European Union to suspend its new restrictions on financial assistance to Israeli institutions in order to show the Israeli public the benefit of pursuing a peace agreement with the Palestinians.

“I think it’s important that the Israeli people and the government see that coming to the talks, taking the risk of moving toward peace is worthwhile,” Mr. Kerry said.

In June, the European Union issued guidelines that would preclude financing and cooperating with institutions in territories occupied by Israel after the 1967 war. The guidelines, which have yet to take effect, were intended to pressure Israel to change its policy on Jewish settlements in the West Bank and seek a peace agreement with the Palestinians.

The restrictions were of great concern to Israeli officials, who feared they would be the opening salvo in a campaign to isolate Israel and punish its economy.