A building under construction is seen in the West Bank Jewish settlement of Beitar Illit.

Construction started on 1,800 homes for Israeli settlers in the occupied West Bank last year, 265 of them in wildcat outposts, settlements watchdog Peace Now said Sunday in its annual report.

The overall number of starts was down sharply from the 3,100 that Peace Now reported for 2014 as right-winger Benjamin Netanyahu campaigned for a third term as prime minister, but was slightly higher than in the preceding years.

The year “2014 was an exceptional year in terms of construction”, the Peace Now report said.

It said that in 2015 work on infrastructure was carried out for planned construction of at least another 734 housing units in the West Bank.

“Despite government declarations of a ‘freeze’, construction on the ground continued in full force,” the report said.

Settlers did not contest the latest figures, but said they were evidence of a devastating spiral.

“The numbers that Peace Now talks about only prove what a difficult state we in the settlement movement have been in for a long time,” Shilo Adler, head of the Yesha Council of Jewish settlements, told public radio.

“How can it be that with a settlement population of close to half a million we are building in such low numbers?”

About 380,000 Israelis live in West Bank settlements, with another 200,000 in east Jerusalem.

The report does not cover Israeli-annexed east Jerusalem.

Israel seized the West Bank and east Jerusalem in the 1967 Six-Day War. It later annexed east Jerusalem in a move never recognized by the international community.

Israel’s settlement expansion has been a major source of contention with the international community. U.S. Secretary of State John Kerry said in December that such a policy raises “honest questions about Israel’s long-term intentions”.

U.S.-backed peace talks between the Palestinians and Israel collapsed in April 2014 amid bitter mutual recriminations.

A chief grievance of the Palestinians was the building of Jewish settlements on land they claim for a future state.

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