Construction on settler homes in the Israeli-occupied West Bank soared by 70 percent between April 2016 and March 2017, data released by Israel's Central Bureau of Statistics showed on Monday.
Since April 2016, work began on 2,758 dwellings, compared to 1,619 during the previous 12 months.
The figures do not include Israeli-annexed East Jerusalem which the Jewish state considers an integral part of its "indivisible capital".
Settlement watchdog Peace Now said the settlement boom coincided with a 2.5-percent drop in construction starts inside Israel.
"Instead of working to solve the Israeli housing crisis, the government prioritises a radical minority living beyond the boundaries of the state," it said.
"Such construction continues to distance us from the only way to end the Israeli-Palestinian conflict, a two-state solution."
More than 600,000 Israelis live in settlements in the West Bank, including East Jerusalem, which is seen as a major obstacle to peace between Israel and the Palestinians.They live alongside some three million Palestinians.
Earlier this month, Israel green-lighted plans for more than 3,000 settler homes.
The projects are at various stages in the planning process, and the units are located in a number of settlements across the West Bank.
US President Donald Trump is seeking to restart peace negotiations between the Israelis and the Palestinians, stalled since talks collapsed in 2014.
Trump has called on Prime Minister Benjamin Netanyahu to hold back on settlement building as he seeks to build momentum.
Netanyahu, however, faces political pressure from the settler movement, which wields heavy influence in his right-wing governing coalition.
"There was not and will not be a better government for settlement than our government," he told senior members of his Likud party on Monday.
"We build in all parts of the country, we do it with determination, methodically and wisely," he said.