Jewish settlers have started building 1,649 homes since the end of a freeze in construction on September 26, watchdog Peace Now said on Sunday, more than making up for the 10-month ban on new building.

Figures compiled in a new report by the Israeli group show that in more than two-thirds of the cases, building work had begun on the foundations for new homes, with work being carried out in 63 separate settlements.

During 2009, construction work began on 1,888 new housing units, the report said, citing data from Israel's Central Bureau of Statistics.

"Had the construction continued at the same speed without the freeze, work would have begun on 1,574 units during the 10 months of the moratorium," Peace Now said.

"In the six weeks since the end of the moratorium, the settlers have managed to start construction on a similar number of units."

The report was published just hours before Israel's cabinet meets to discuss a US incentives package designed to persuade it to impose a new freeze in a bid to salvage moribund peace talks with the Palestinians.

A source close to the negotiations said the proposal would involve a 90-day settlement freeze in the occupied West Bank but not in east Jerusalem.

It would involve freezing all construction started since the end of the moratorium on September 26.

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