Katherine Paterson, a local author, has won the Newbery Medal for her novel "Bridge to Terabithia. "It was 5:49 on a slushy Wednesday morning hen the phone rang in her Tacoma Park home. Six-hundred miles away in Chicago the 21-member Newbery-Caldecott jury had wrestled all night to decide which children's book should bear the citation. "The most distinguished contribution to literature for children published in the United States during the preceding year."

Like so many American children, Paterson spent her childhood reading "Newbery books," and she said yesterday that to have written one as a grown-up was a "fantasy fulfilled."

Last year another phone call had brought Paterson the news that the third of her Japanese historical novels for young readers, "The Master Puppeteer," had won a National Book Award. "Bridge to Terabithia," the story of two rural Virginia children, their private world and a sudden tragedy, is Paterson's first book set in contemporary America.

"Terabithia," which is dedicated to her son David, is based on a factual incident in which a little girl did lose her life. Paterson was deeply concerned about the family's reactions to her book. "While writing it, I was haunted by the fear that they might find it too painful to read," she said. But when she discovered that they liked the book, "It meant more to me than any award."

Two runners-up, called Honor Books, were also selected for the Newbery. "Ramona and Her Father" by Beverly Cleary continues the adventures of the impossible, funny, always-in-trouble heroine: and "Anpao: An American Indian Odyssey" by Jamake Highwater weaves a story from Indian folktales that gives the reader some startling insights into how it feels to be Indian.

The noctural jury chose Peter-Spier's "Noah's Ark" for the Caldecott Medal, given for the most distinguished picture book of the year. The artist illustrated his own translation of a 17th-century Dutch powen with pictures of amazing and zany detail.

Honor Books for the Caldecott were David Macaulay's "Castle" and Margot Zemach's "It Could Always Be Worse."