Israel built 2,630 illegal settler homes in the occupied West Bank in 2016, an increase of 40 percent compared with numbers from 2015.

According to figures released by Israel's Central Bureau of Statistics on Wednesday, construction was at its "second highest" in 15 years, falling slightly short of the 2,874 illegal homes built in 2013.

Citing the official data, Peace Now - an anti-settlement NGO - said 14,017 units were started since Prime Minister Benjamin Netanyahu returned to office in 2009, though settlement construction has continued under successive Israeli leaders.

"The sharp increase in settlement construction sends a clear message to the Palestinians and to the international community that Israel is not interested in a two-state solution," Peace Now said.

UN report decries Israeli settlements 'alarming pace'

Israeli settlement-building is seen as illegal under international law and a major obstacle to peace as they are built on land the Palestinians see as part of their future state.

Much of the international community has raised increasing alarm over settlement expansion, saying it is gradually eating away at prospects for a two-state solution to the decades-old Israeli-Palestinian conflict.

Netanyahu has repeatedly vowed to continue settlement expansion.

In March 2015, the day before Israelis re-elected him, Netanyahu promised to prevent the establishment of a Palestinian state under his watch.

Since the January 20 inauguration of US President Donald Trump, Israel has approved the construction of 566 housing units in three settlement areas of occupied East Jerusalem, and announced the building of 2,502 more in the West Bank.