I have verified that the directory does not exist before attempting an update. The error I get is as follows.
Do you really want to continue? (y/n): y
Executing: svn info /home/sites/lg/public_html/drupal-7.26
Executing: bzr root /home/sites/lg/public_html/drupal-7.26
Executing: wget -q --timeout=30 -O /tmp/download_filexptX5V http://ftp.drupal.org /files/projects/drupal-7.26.tar.gz
Downloading drupal-7.26.tar.gz was successful. [notice]
Md5 checksum of drupal-7.26.tar.gz verified. [notice]
Mime type for /home/sites/lg/public_html/drupal-7.26.tar.gz is application/x-gzip [notice]
Executing: tar -C /home/sites/lg/public_html -xzf drupal-7.26.tar.gz
Unable to untar /home/sites/lg/public_html/drupal-7.26.tar.gz. [error]
Destination directory /home/sites/lg/public_html/drupal-7.26 already exists. [error]
Project drupal was updated successfully. Installed version is now 7.26.
I am on a vps using CentOS 6.5 Drush version 5.9 Currently installed version of Drupal is 7.23