Palestinian leaders voiced outrage Tuesday over a new report that Israeli settlement construction in the West Bank rose 20% last year. The report released by the Peace Now group also says that building on East Jerusalem land seized during the 1967 Middle East War was at the highest level in a decade.

The study by the Israeli group, which is opposed to settlement construction, found that Israel began construction on more than 1,850 West Bank units in 2011, up from 1,550 in 2010. During much of 2010, Israel observed a partial moratorium on new West Bank construction, which reduced building starts that year.

The data on new construction angered Palestinian leaders, who blame Israel's settlement policy for stalled peace talks.

"It should send alarm bells to the world that Israel is killing any chance for the two-state solution," Palestinian Authority government spokesman Ghassan Khatib said.

The housing expansion was most dramatic in East Jerusalem, where plans for 3,690 units were approved and plans for an additional 2,660 units were unveiled, Peace Now said.

The government of Israeli Prime Minister Benjamin Netanyahu "is promoting several plans precisely in disputed areas which could prevent the possibility of establishing a Palestinian state alongside Israel," the report says.

Israeli officials defended the settlement policy, saying their self-imposed 10-month moratorium on new construction in 2010 failed to bring Palestinians back to the negotiating table as expected. Israel is also saddled with a housing shortage.

Palestinians have boycotted formal peace talks until Israel halts all settlement construction, but both sides resumed low-level meetings in Jordan in recent days in an effort to revive negotiations.

Palestinian officials said Tuesday that the preliminary talks have not yielded any breakthroughs.