A new report by Israel's Peace Now movement says the construction of Israeli settlements increased by 20 percent last year compared to 2010, despite opposition from the Palestinians and the international community, which consider it an obstacle to peace.

Peace Now director Yariv Oppenheimer, who announced the findings Tuesday, said that although 2011 was an excellent year for the Jewish settlers, it was bad for peace because the construction is destroying the opportunity for a two-state solution.

Oppenheimer said Israel approved construction of thousands of Jewish homes in the West Bank and East Jerusalem — two territories the Palestinians seek for a future state.

The Israeli government dismissed the movement's figures as exaggerated and said it has exercised “great restraint” with regard to settlement construction.

A right-wing member of the Israeli parliament, Arieh Eldad, said building is a “biblical and historical right,” and that “Jews can live everywhere in the Land of Israel, everywhere in their homeland.”

But Palestinian spokesman Ghassan Khattib said “the Israeli government has chosen settlements over peace, further undermining the chances of resuming a meaningful peace process and putting the whole region in danger.”

The report was issued a week after Israeli and Palestinian negotiators attended their first official meeting in 15 months in an effort to revive the stalled Middle East peace process.

Israeli negotiator Yitzak Molho and his Palestinian counterpart, Saeb Erekat, met in the Jordanian capital, Amman, in the presence of diplomats from Jordan and the Quartet of Middle East peace negotiators.

It was the first known contact between the two sides since peace talks broke down in September 2010 over a dispute about Israeli settlement construction on occupied land.