UPDATE 2-Tropical Storm Dolly in warm Gulf of Mexico-NHC

(Updates with latest NHC report, recasts)

NEW YORK, July 21 (Reuters) - Tropical Storm Dolly was over the warm waters of the Gulf of Mexico on Monday and could become a hurricane by Tuesday, the U.S. National Hurricane Center said in its latest report.

Weather models show the storm crossing the western Gulf and striking the South Texas coast on Wednesday. Some models showed a strike near the Texas border with Mexico, while others showed Dolly hitting further north along the coast near Corpus Christi, Texas.

A hurricane watch was issued for the Texas coast from Brownsville northward to Port O'Connor. A hurricane watch means that hurricane conditions are possible within the watch area, generally within 36 hours.

A tropical storm watch was issued for the Texas coast from north of Port O'Connor to San Luis Pass, the NHC said.

Dolly was moving west-northwest at nearly 18 miles per hour, with a gradual decrease in forward speed and little change in direction expected for the next couple of days. Dolly was expected to approach the coast of the western Gulf of Mexico by Wednesday.

Maximum sustained winds were near 50 mph with higher gusts.

The NHC was also issuing advisories on Tropical Storm Cristobal, about 190 miles east-northeast of Cape Hatteras, North Carolina, and was monitoring a large, well-defined tropical wave just inland over extreme western Africa.

The NHC said the wave had the potential for some development after it emerges into the eastern Atlantic within the next day or so.