diff --git a/asterixdb/asterix-app/src/main/java/org/apache/asterix/app/translator/QueryTranslator.java b/asterixdb/asterix-app/src/main/java/org/apache/asterix/app/translator/QueryTranslator.java
index 754e2b6..7ddf877 100644
--- a/asterixdb/asterix-app/src/main/java/org/apache/asterix/app/translator/QueryTranslator.java
+++ b/asterixdb/asterix-app/src/main/java/org/apache/asterix/app/translator/QueryTranslator.java
@@ -1704,7 +1704,7 @@
             validateDatasetState(metadataProvider, ds, sourceLoc);
 
             ds.drop(metadataProvider, mdTxnCtx, jobsToExecute, bActiveTxn, progress, hcc, dropCorrespondingNodeGroup,
-                    sourceLoc, Collections.emptySet(), requestParameters.isForceDropDataset());
+                    sourceLoc, EnumSet.of(DropOption.IF_EXISTS), requestParameters.isForceDropDataset());
 
             MetadataManager.INSTANCE.commitTransaction(mdTxnCtx.getValue());
             return true;
@@ -1720,6 +1720,10 @@
                 try {
                     if (ds != null) {
                         jobsToExecute.clear();
+                        // start another txn for the compensating operations
+                        mdTxnCtx.setValue(MetadataManager.INSTANCE.beginTransaction());
+                        bActiveTxn.setValue(true);
+                        metadataProvider.setMetadataTxnContext(mdTxnCtx.getValue());
                         ds.drop(metadataProvider, mdTxnCtx, jobsToExecute, bActiveTxn, progress, hcc,
                                 dropCorrespondingNodeGroup, sourceLoc, EnumSet.of(DropOption.IF_EXISTS),
                                 requestParameters.isForceDropDataset());
diff --git a/asterixdb/asterix-transactions/src/main/java/org/apache/asterix/transaction/management/resource/PersistentLocalResourceRepository.java b/asterixdb/asterix-transactions/src/main/java/org/apache/asterix/transaction/management/resource/PersistentLocalResourceRepository.java
index 508eb76..29dedf7 100644
--- a/asterixdb/asterix-transactions/src/main/java/org/apache/asterix/transaction/management/resource/PersistentLocalResourceRepository.java
+++ b/asterixdb/asterix-transactions/src/main/java/org/apache/asterix/transaction/management/resource/PersistentLocalResourceRepository.java
@@ -230,20 +230,21 @@
     @Override
     public synchronized void delete(String relativePath) throws HyracksDataException {
         FileReference resourceFile = getLocalResourceFileByName(ioManager, relativePath);
-        if (resourceFile.getFile().exists()) {
-            if (isReplicationEnabled) {
-                createReplicationJob(ReplicationOperation.DELETE, resourceFile);
+        try {
+            if (resourceFile.getFile().exists()) {
+                if (isReplicationEnabled) {
+                    createReplicationJob(ReplicationOperation.DELETE, resourceFile);
+                }
+                final LocalResource localResource = readLocalResource(resourceFile.getFile());
+                IoUtil.delete(resourceFile);
+                // delete all checkpoints
+                indexCheckpointManagerProvider.get(DatasetResourceReference.of(localResource)).delete();
+            } else {
+                throw HyracksDataException.create(org.apache.hyracks.api.exceptions.ErrorCode.RESOURCE_DOES_NOT_EXIST,
+                        relativePath);
             }
-            final LocalResource localResource = readLocalResource(resourceFile.getFile());
-            // Invalidate before deleting the file just in case file deletion throws some exception.
-            // Since it's just a cache invalidation, it should not affect correctness.
+        } finally {
             resourceCache.invalidate(relativePath);
-            IoUtil.delete(resourceFile);
-            // delete all checkpoints
-            indexCheckpointManagerProvider.get(DatasetResourceReference.of(localResource)).delete();
-        } else {
-            throw HyracksDataException.create(org.apache.hyracks.api.exceptions.ErrorCode.RESOURCE_DOES_NOT_EXIST,
-                    relativePath);
         }
     }
 
diff --git a/hyracks-fullstack/hyracks/hyracks-storage-am-common/src/main/java/org/apache/hyracks/storage/am/common/dataflow/IndexDropOperatorNodePushable.java b/hyracks-fullstack/hyracks/hyracks-storage-am-common/src/main/java/org/apache/hyracks/storage/am/common/dataflow/IndexDropOperatorNodePushable.java
index e48db2b..3b6669e 100644
--- a/hyracks-fullstack/hyracks/hyracks-storage-am-common/src/main/java/org/apache/hyracks/storage/am/common/dataflow/IndexDropOperatorNodePushable.java
+++ b/hyracks-fullstack/hyracks/hyracks-storage-am-common/src/main/java/org/apache/hyracks/storage/am/common/dataflow/IndexDropOperatorNodePushable.java
@@ -21,6 +21,7 @@
 
 import static org.apache.hyracks.api.exceptions.ErrorCode.CANNOT_DROP_IN_USE_INDEX;
 import static org.apache.hyracks.api.exceptions.ErrorCode.INDEX_DOES_NOT_EXIST;
+import static org.apache.hyracks.api.exceptions.ErrorCode.RESOURCE_DOES_NOT_EXIST;
 import static org.apache.hyracks.storage.am.common.dataflow.IndexDropOperatorDescriptor.DropOption.IF_EXISTS;
 import static org.apache.hyracks.storage.am.common.dataflow.IndexDropOperatorDescriptor.DropOption.WAIT_ON_IN_USE;
 
@@ -96,7 +97,7 @@
     }
 
     private boolean isIgnorable(HyracksDataException e) {
-        return e.matches(INDEX_DOES_NOT_EXIST) && options.contains(IF_EXISTS);
+        return (e.matches(INDEX_DOES_NOT_EXIST) || e.matches(RESOURCE_DOES_NOT_EXIST)) && options.contains(IF_EXISTS);
     }
 
     private boolean canRetry(HyracksDataException e) throws HyracksDataException {