USG won 2-0 on Wednesday thanks to an impressive individual goal from Youssef Hamoutahar before Sekou Keita struck to take the game away from the visitors.
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It was a second UYL defeat for Newcastle, which also lost to Barcelona in the first round.
England U18 international Sean Neave went closest for Newcastle, hitting a post late on and was their most impressive player on the day.
Neave also made his senior debut for Newcastle in preseason against Celtic.