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Tottenham Hotspur teenager Terry Dixon is also included following his impact while training with the squad ahead of the Chile match in May.
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Commenting on Carr's return, Staunton said: 'I am delighted to have the opportunity to name Stephen Carr on my squad for the game next week against The Netherlands.
'Stephen has vast experience on the international scene and its great to see him back. I feel he still has something to offer while playing for his country.'
The clash with the Dutch is Staunton's last warm-up match before he finalises plans for the European Championship qualifying campaign, with the Republic starting against Germany in Stuttgart on September 2.
Carr is part of a strong Magpies contingent that includes goalkeeper Shay Given and new £5million capture Damien Duff following his move from Chelsea a fortnight ago.
Also included for the first time in Staunton's squad is 21-year-old midfielder Alan O'Brien from Dublin, who has made five substitute appearances for United this year.
Sunderland striker Stephen Elliott returns to the squad. The FAI, meanwhile, have agreed a two-year, six-figure sponsorship deal with Oceanico Developments.
Oceanico will serve as the official leisure facilities supplier to the FAI, in particular with their luxury four and five-star resorts in the Algarve.
Staunton, whose squad used the facilities in May prior to a friendly against Chile, added: 'Relocating the team to the warmer, sunnier climate proved a great opportunity for intensive tactical training.
'It helped to keep the squad focused and in the best possible condition. Now, the FAI will have access to these same facilities when we need them most, giving the team another tool to help prepare for the qualifying matches ahead of Euro 2008.'
Ireland squad: Shay Given, Paddy Kenny, Wayne Henderson, Andy O'Brien, Richard Dunne, John O'Shea, Ian Harte, Steve Finnan, Stephen Carr, Stephen Kelly, Liam Miller, Steven Reid, Graham Kavanagh, Kevin Kilbane, Alan O'Brien, Aiden McGeady, Terry Dixon, Damien Duff, Kevin Doyle, Clinton Morrison, Alan Lee, Stephen Elliott, Robbie Keane.