The children doing an Indian dance seemed as noisy and high-spirited as any group of elementary school youngsters, but they were far from being a typical bunch of children.

All of them were reading at least two years above grade level.All of them had IQs of 125 or more - the top 5 percent on the tests.

One of the girls stamping across the carpeted floor at George Washington University was Amy Carter, President Carter's 10-year-old daughter. Near her in line was Alice Jay, 9, whose grandfather is British prime minister James Callaghan. (Alice's father, Peter Jay, is the British ambassador to Washington)

However, the class of 26, which meets at the university two afternoons a week, also includes Marcel Prather, who lives in a low-income neighborhood in Southeast Washington, and Jayne Meeks, of Hyattsville, whose father is a postman.

"What these children have in common and what makes them different from others is their aptitude," said Patricia Carter (no relation to Amy), who is coordinator of the program for "GIFTED, From C1> academically gifted children at the university reading center.

"They can learn much more quickly," Mrs. Carter explained. "They do more. They work at more things. They're more interesting people. They also have more energy, more humor - sometimes a little too much humor. While they were all doing the Indian dance, there was one boy going, 'Choo-choo.'"

The program for gifted students was started at the university last summer for the bright youngsters from Washington's public schools. The city's schools have long been involved in controverises over what to do for unusally bright students since the time of official segregation that ended in 1954.

The George Washington University program was financed partly by the city school board, but when money ran out, the universtiy opened the class last fall to paying students from both public and private schools throughout the area.

The 43 public school students in the month-long program last summer (including Amy Carter) were picked by teachers and principals as among the brighest children in their schools. They came from grades 2 through 8, and were evenly divided among the system's six adminstrative regions. No IQ tests or standarized reading exams were used to screen them.

When they were tested at the university in late June the results were disappointing.

Although a few of the students scored in the top 1 per cent nationwide, according to Florence Hesser, the director of the reading center, others were two-years behind the national averages in reading. Most of them ranged from a year below the national norms to a year above, Hesser said, well above the average for D.C. public schools but low for a program for gifted students.

Just after the testing. Hesser said "expressed grave concern and deep disappointment in the skills of the children . . . Due to inferior basic reading, writing, and communications skills, the format of the calsses was revised to start at a lower level."

In four weeks of the special classes, she reported, the children made major academic gains, as shown in their writing samples and use of complex concepts, although standardized tests were not repeated.

Even at the start, she said, the D.C. children showed many signs of academic talent - "retention, alertness, excellent questions . . . (advanced) verbal expression and creative thinking."

"We were convinced the school system really had sent us gifted children," she said. "Their (reading test) averages should have been two or three grades above the national averages, but they weren't. They had been moved along and didn't get the challenges they should have. Their basic skills were inferior, but when they were stimulated, they progressed very rapidly."

"It was very stimulating last summer," said Marcel Prather, 11. "It was fun being around a lot of other people you can learn from. At public school most of the students act as if there's nothing that important to do at school. They're more interested in other things . . . If someone's ahead of other people, they make fun of him because he's ahead."

Marcel is back in the George Washington program this winter, but he is not back in Moten School, the neighborhood public school at Elvans and Morris Roads SE, where he had been a fifth-grader. Intead, he has enrolled on scholarship at Burgundy Farm, a private school in Alexandria. The bus ride to get there takes about 90 minutes each way. Marcel's mother Bessie Prather said she is glad he made the switch because he is getting a better education.

The issue of what kind of education to give very bright children has long been a difficult one for the Washington school system.

Until desegregatio in 1954 there was considerable ability grouping among both black and white students. For blacks there was selective academic high school. Dunbar, with a nationwide reputation.

In the late 1950s, under superintendent Carl Hansen, the school board adopted an elaborate track system of ability grouping with an honors track starting in fifth grade. By 1966 about 3,800 children - 3 percent of total enrollment - were in honors classes, separated from other students most of the day.

However, in 1967 Judges J. Skelly Wright ruled that the track system discriminated against blacks, who were seriously under-represented in honors classes and over-represented in classes for slow learners.

Wright said the school system could carry out ability grouping, though not the rigid track system itself, but D.C. school officials have shied away from it for the past 10 years, although some advanced courses are offered in high school.

Shortly after the honors track was abolished many black children who were in it switched to private schools.

Blacks private school students now account for two-thirds of Washington's semifinalists in the National Achievement Scholarship Program for Outstanding Negro Students, even though blacks in public school outnumber them 10 to 1. In 1967 the public school produced about 80 percent of the city's semifinalists in the contest, which is based on a nationwide exam.

"A lot of the brightest students probably aren't in our school any more," one D.C. school official said, "or else we aren't bringing out all the talent they have. We ought ot provide the best education there is for all types of kids. But so many come to us with serious problems, you know. It's at that end of the spectrum that we've had to put our emphasis.%

This year the school system has $85,000 in federal grants to plan parttime programs for bright elementary and junior high students in all parts of the city. Four elementary schools already have such programs but they are very small with les than 150 children althogether.

"I know there still are a great many gifted students in the D.C. public schools," said Hesser, the director of the university reading center. "But their basic skills are inferior. They're not doing well on the standardized tests. They're just not being recognized. We have to develop new ways to select them, and new ways to work with them.

She said she hopes the program at George Washington can serve as a model of what could be done in centers for the gifted that the D.C. school set up.

Of the 26 students in the program now, seven are enrolled in D.C. public schools (all from west of Rock Creek Park except for Amy Carter who is a fifth-grader at Stevens Elementary downtown). Six students attend suburban public schools, and 13 are in private schools, including Alice Jay, who is a fourth-grader at National Cathedral School for Girls. The youngsters now ranges from grades 4 to 7.

Tuition is $300 a semester for a series of two-hour classes that meet twice a week in late afternoon.

Unlike the students last summer, all those enrolled now are far above the national norms on standardized tests, Hesser said. The reading center tried to develop their analytical and reasonmally would not encounter.

For example, the Indain dance the children did enthusiastically was part of the physical exercise that starts most afternoons' classes. It was accompained by a heavy dose of anthronpology and a lively discussion of superstition and magic.

In a mathematics class the students played a complicated math game.

In English, teacher Lee Ingram asked them to write for 15 minutes about how they would feel if they were soldiers who had killed someone for the first time in battle.

"When it's 5:30 p.m. we're always suprised," said Mrs. Carter. "Those children are easy to get excited, and when they're here they stay that way."

As for being in a class with the president's daughter, several of the students said they were excited when they first met Amy Carter but feel the class isn't any different because she is in it.

Hesser said Rosalyn Carter has attended three meetings for parents about the program. Mary Finch Hoyt, Mrs. Carter's press secretary, said the president and his wife are "delighted with Amy's progress" in it.

Other parent also seem enthusiastic.

"When my son comes home, he's dancing," said Miriam Kohn, David's mother. "It'slike they 've been feeding him frugs of something. I don'n know what they do to turn those bright kids on. They sure don't do it all the time in school even though Lafayette's been pretty good."