AC Milan winger Gerard Deulofeu meanwhile returns to the squad for the first time since 2014 and Real Sociedad midfielder Asier Illarramendi has earned his first call up.
Pedro was a key member of the Spain team that won the World Cup in 2010 and the European Championships in 2012 but had yet to be called up by new coach Julen Lopetegui, who took over from Vicente del Bosque last summer.
Pedro had been criticised for reacting badly to being left out of the starting line-up during the 2016 European Championships in France, telling reporters in June he did not want to be part of the squad if he did not play.
The former Barcelona forward struggled in his first campaign at Chelsea since leaving the Catalans in 2015 but has had a new lease of life under Antonio Conte, scoring 11 goals and providing seven assists in all competitions for the Premier League leaders, who are also in the FA Cup semi-finals.
Spain, who are top of World Cup qualifying Group G but level on 10 points with Italy, host Israel, third on nine, on March. 24 before travelling to France for a friendly on March 28.
(Reporting by Richard Martin; Editing by Alison Williams)
