More than a thousand elementary school children yesterday morning burst into screams, cheers and catcalls as the lights went down for the start of a performance on the Eisenhower stage.

For over 50 minutes thereafter the house was hushed. Then an actor, playing the part of a radio, decided that he'd join a movement for a better future. At that, the children exulted in a loud, engulfing cheer.

The play is called "Concrete Dreams," to be repeated several times during a week devoted to "An Imagination Celebration - 1978," a justifiable title for this second National Children's Arts Festival sponsored by the Kennedy Center, the Alliance for Arts Education, the Kennedy Center's Corporate Fund and a grant from McDonald's Corp.

Adults would have been as fascinated as the children were with Doris Baizley's imaginative script for "Concrete Dream." It is about how a driver, his dog and his radio - stuck in a traffic jam on a Los Angeles freeway - make a journey backward and foreword in time. This is an ingenious way of indicating a city's past and its possible future. The choice, Baizley dramatizes, is what we do now. Man, dog and radio decide that, having seen a future, they want a better one.

The day has seven immensely gifted actors who have appeared together for some years as part of ITP, the Improvisational Theater project of the Mark Taper Forum, Los Angeles. And the staging is an ingenious mix of mine, movement, lighting and sound effects. Director John Dennis and Baizley have worked together with tandem imaginations.

On a raked portion of the stage and with "headlights" at both ends of black sticks, the seven actors become cars and trucks jockeying for position on the freeway. By indicating that their journey backward in time means going down and that their trip forward means they must rise upward, the players' bodies skip back through the 1960s, '50s, '20, into the 19th century, the Civil War and the settlement of California.

Music and lighting simple but strikingly precise, are subtle prods. But as the performers' imaginations stretch, so, too, do those of the young audience.

Yesterday's absorbing silences were as indicative of the work's effects as were the cheers for a hopeful future. Smidgens of history, Indian lore, the Mexican hertiage and dress and manners of the 21st century all might have seemed beyond the ken of this audience, but, thanks to the power of suggestion, past and future seemed strikingly clear.

A second Eisenhower event in this series comes this morning when, under the direction of Sarah Caldwell, Opera New England presents "The Jumping Frog of Calaveras County," composed by Lucas Foss from the Mark Twain short story.

In the terrace laboratory Theater two groups - Drums, Whales and Eskimo Tales, created by Long Island's Arts-in-Education Troupe, and WE 3, a musical trio of black performers, Leon Bibb, Gail Nelson and Stan Keen - are alternating performances. On Thursday morning at 10:30 puppeteer George Latshaw will reveal his work with handicapped children in the Grand Foyer.