How To Run 'create Database' As Part Of A Script?

I'm trying to write a script can be run in two iterations on a system, based on the existence of a database. The first iteration will create the database if it doesn't exist, the second will create tables and content. However I'm unable to script this properly as 'create database' seems to break any loop I add it into since it apparently can not run in a transaction. I'm obviously missing something really fundamental here, does anyone have any idea how to make this work?


USE [MASTER]
IF NOT EXISTS(select 1 from [master]..[sysdatabases] where name='testdatabase')
BEGIN
CREATE DATABASE [testdatabase]
END
ELSE
BEGIN
CREATE TABLE [testdatabase].[dbo].[testtable](
[Id] [int] NOT NULL
)
END