Huddled together on the back steps of Luther Place Memorial Church, the 4-year-old stared wide-eyed at the aliens on the other side of the street.

What fascinates the preschoolers in the church's day-care center are a score of prostitutes who stake out positions each day along the fence across from the church at N Street and Vermont Avenue NW, snapping their fingers to attract passersby.

The women's scant attire and foul language have so distressed the center's director that she no longer lets the children play on the church's playground on the other side of the street, where the women hang out all day long.

"I'm really frustrated and angry when I see them there," said Jeanette Williams, the center's director. "We're trying to teach proper role models here. When the kids go out and see this, it's very hard to show the right was to grow and develop and get the kids to believe us."

So instead of playing on the trashstrewn playground, the children are ushered by their adult supervisors over seven blocks to the Stead Recreation Center at 16th and P streets NW.

For many years, prostitutes have gathered along the 14th Street strip from about I Street to R Street NW. But recently they have branched off 14th onto N Street and other crossing streets. Williams said several months ago she began to feel that the playground was no longer a safe place for the approximately 80 children who stay at the center.

"They [the prostitutes] talk dirty language out there, not to the kids, but to each other. These kids, too, will have foul mouths if they hear that stuff day in and day out."

Though Williams expressed concern that the center could lose its day-care license, a city official dismissed that.

"Prostitutes hanging out on the streets do not permit a problem to the children just by standing there," said Theresa Roberts, a spokeswoman for the District's office of licensing and certification in the Department of Health and Human Services. The office annually inspects the center and the surrounding facilities to ensure that they are safe, clean and well maintained. "As I see it, the center stands in good stead," she said.

The center's playground needs about $700 worth of repairs -- the ground must be leveled, trash picked up and equipment cleaned and repaired. But Williams said she won't bother submitting a request to the church the property owners, and to the United Planning Organization, which own the equipment, until the women leave the block.

About 10 parents have taken their children out of the center in recent months and other parents have expressed concern about the prostitutes.

"It's absolutely disgusting," said Melinda Fallen, who takes her 5-year-old son Ronte to the center because it is close to Riggs National Bank branch where she works. "My chilid asked me one day why some woman was standing on the corner in a swimsuit and six-inch-high silver shoes. I lied and said she was going to the beach."

Said Ron Harrington, another parent : "I always have to be telling my daughter not to dress like that, not ever. It doesn't scare me all that much, it just sickens me. I constantly have to tell my daughter this is not how the rest of the world acts."

Four-year-old Kelly Baggatts, who has attended the center for two years, said she had noticed the women. "Those ladies, yeah, they have funny clothes on them . . . . My mommy wouldn't wear that and if my sister wore it, she'd be spanked real bad."

Another 4-year-old hugged her older sister's leg and said, "Everything about them is funny -- they look ugly. When I grow up, I'm going to wear a cute little dress, not one like that."

For their part, many of the prostitutes said they enjoy watching the children. Occasionally the women dressed in everything from bikinis to rhinestone-studded evening gowns, can be seen waving to the kids on their way to the playground.

"The furthest thing from my mind is trying to hurt those little kids," said one 18-year-old woman. "My mind's on getting a quick fix, making a living at what I do out here."

"You think we care about those kids?" asked another, reaching for a cigarette in a pack tucked in her bra, "I guess we do. We'd prefer not to talk dirty out here. But that's what the men want to hear. And we're not here for the kids, we're here for the men."

D.C. Police Lt. Edwin Casey, in charge of the prostitution detail, said there is not much the police can do unless the laws against prostitution are tightened. Under the current law, a prostitute cannot be arrested for solicitation unless it is done verbally.

Casey said he could understand why the day-care center was concerned about the women, but said, "The kids are not in any danger -- at least not yet"

"It's part of life," said one parent with resignation. "I suppose we can't shield our children from it forever."