I agree with JoyRenee. Wait another week or so and have another ultrasound. If there is no change at that point, THEN you can discuss a possible D&C.
I've had two miscarriages, one needed a D&C and the other was a natural miscarriage. The reason doctor's recommend a D&C when women have a missed abortion (when the embryo/fetus dies, but the body does not expel it naturally) is that the longer the tissue remains inside your uterus, the higher the chance for developing an infection. Waiting a week or two, however, should not be an issue, so just to make sure, ask for another ultrasound before making a decision. Take care!
You do not have to have a D&C at this time. You can wait and request an ultrasound again. This early on it can be difficult to determine if baby is alive or not! They make mistakes all the time. Besides, if you were to miscarry, you should try to let it happen naturally before going in for a D&C. Those are for women who haven't miscarried naturally. They basically scrape the uterus out, for lack of better words.
Please wait on the D&C, get a second opinion and another ultrasound. I cannot believe your doctor said that to you! I would def. get a different doctor. Wait 2 weeks (because if you were to m/c, it usually happens within 2 weeks).
Let us know what happens!