Tropical Storm Dolly churned over the Gulf of Mexico on Monday, threatening to grow into a hurricane within 24 hours as it headed toward the Mexico-Texas border, the US National Hurricane Center said.

The governments of Texas and Mexico issued a hurricane watch for coastal areas, meaning they could be struck by hurricane-force conditions within 36 hours, the Miami-based center said.

Dolly was packing 80 kilometer per hour (50 mph) winds after emerging from Mexico's Yucatan peninsula. The eye of the storm was about 90 kilometers (55 miles) northeast of Progreso Mexico.

The storm was expected to produce two to four inches (five to 10 centimeters) of rain accumulation in northern Yucatan with isolated maximum amounts of up to six inches (15 cm), the center said.

"Strengthening is forecast and Dolly could become a hurricane by tomorrow," the center said in its latest bulletin issued at 11:00 am (1500 GMT).