Gatland says that the door is not closed to Peel nor other absentees
Scrum-half Dwayne Peel is the shock exclusion from Wales' 28-man squad for their defence of the RBS Six Nations.
"We had a very hard decision to make, but were impressed by the performances of Mike Phillips and Gareth Cooper," said Wales coach Warren Gatland.
Richard Hibbard is the other surprise omission but Blues lock Bradley Davies is the only uncapped man.
Phillips, Gavin Henson, Jamie Roberts, Huw Bennett and Jon Thomas return, while Lee Byrne is also in contention.
Wales assistant coach Robert Howley says Peel was disappointed at his omission and frustrated at not being a regular starter for Sale.
"I spoke to Dwayne on Sunday, he's hugely disappointed," said Howley.
"He's frustrated. The amount of rugby that Dwayne has played has been limited and at the moment he's not playing with the exuberance and the free-flow that we all know what Dwayne Peel can deliver."
Peel, 27, has been rotated in the Sharks' scrum-half role with England international Richard Wigglesworth.
He has started just nine of Guinness Premiership title contenders Sale's 19 games this season, although he was away with Wales for two of them in the autumn, and has come off the bench five times.
The 27-year-old has been rotated in Sharks' scrum-half role with England international Richard Wigglesworth, who has started eight games at scrum-half.
"We're disappointed that he wasn't selected out in Munster which was a key Heineken Cup game for Sale, although he came on and performed very well," said Howley.
"But as I said to Dwayne last night, the door's not closed. We know the talent, but he needs to be starting and playing on a regular basis to see the best of Dwayne Peel and Dwayne understands that.
"I think he's equally frustrated and we haven't seen the end of Dwayne Peel."
Howley insists Peel has not suffered for playing in England, pointing out rival Gareth Cooper plays for Gloucester.
"Gareth Cooper is playing in Gloucester and I think that regarding Gareth he's taken his chance and his opportunity superbly well and there's no message at all," said Howley.
Gatland said: "The scrum-half positions is a decision that we debated long and hard.
"The result is really difficult, it probably boiled down to the fact that Mike Phillips has played more rugby than Dwayne Peel since the autumn.
"But it doesn't mean that the door is always going to be shut for him or anyone."
It doesn't mean that the door is always going to be shut for him [Peel] or anyone
Peel moved from the Scarlets to Sale Sharks in the close season, after Gatland had said that he would give preference to players operating with the Welsh regions.
The 64-cap scrum-half started all three Tests of the 2005 Lions tour in New Zealand and will be hoping to make this year's trip to South Africa.
Ospreys full-back Byrne is included despite an ankle injury scare on the weekend, as is Scarlets winger Mark Jones, who is recovering from an appendix operation.
Both will hope to be fit for Wales' opener against Scotland at Murrayfield on 8 February.
"Mark is still possibly a week or two away from fitness on medical advice, but he's in there because he is an important cog in the team," said Gatland.
Dan Biggar, Martin Roberts, Morgan Stoddart and Eifion Roberts drop out of the squad from the autumn Test series.
Prop Duncan Jones, lock Ian Evans and back-rower Gareth Delve were not considered due to injury.
There is no place for Blues wing Tom James, who could be facing a ban after being sent off in the Blues' win over Gloucester on Sunday.
"There are a few important players back from injury," said Gatland.
"Huw Bennett is back with us and the likes of Mike Phillips, Gavin Henson and Jonathan Thomas have been unavailable to us for some time now so we think they are going to really to strengthen the squad."
Added Gatland: "We've tried to keep the squad relatively similar to the last Six Nations campaign.
"Part of that philosophy is to keep everything nice and tight and everyone in the squad feeling there is an opportunity to play for Wales and also make it difficult for people to come into the squad - make players really earn the right."
*Wales are due to name their team to face Scotland on Wednesday, 4 February (approx. 1300 GMT)
Forwards (16): Gethin Jenkins, John Yapp, Adam Jones, Rhys Thomas, Matthew Rees, Huw Bennett, Ian Gough, Alun Wyn Jones, Luke Charteris, Bradley Davies, Ryan Jones (capt), Jonathan Thomas, Dafydd Jones, Andy Powell, Martyn Williams, Robin Sowden-Taylor.
Backs (12): Mike Phillips, Gareth Cooper, Stephen Jones, James Hook, Gavin Henson, Andrew Bishop, Jamie Roberts, Tom Shanklin, Shane Williams, Leigh Halfpenny, Mark Jones, Lee Byrne.