Montgomery County fire and police officials are cracking down on children suspected of setting fires by arresting those age 7 and older and forcing them to complete a three-month program that includes psychological evaluations and fire safety education.

The stricter county program, called Operation Extinguish, has worked with 60 teen-agers or preteen-agers since it began last year as authorities struggled to reduce the number of fires. According to statistics released by the Department of Fire and Rescue Services, people under the age of 18 were the cause of 80 percent of the intentionally set fires in the county last year that resulted in $2.8 million in property damages.

Children referred by the county police youth division to the program are required to attend six hours of fire safety and prevention classes, undergo a 90-minute psychological evaluation with their family and spend 36 hours participating in sports and recreational activities at the Montgomery County Police Boys and Girls Club in Rockville or Silver Spring, where they must purchase a one-year membership. The county funds the fire classes and the psychological evaluation.

Before Operation Extinguish was started, police would arrest only those children suspected of being major offenders and their cases would be taken through the juvenile court system. Some of the youths not considered to be major offenders were counseled individually by fire investigators.

But now, about 80 percent of juvenile arson arrests are being referred to the new program, said Arlene O'Donnell, a police youth division detective who makes the referrals. The others considered to be major offenders are still sent to the juvenile court system.

Those participating in Operation Extinguish are not taken to court but their arrest is noted on their confidential juvenile record and can be used against them after age 18 but only for determining bond or in sentencing, a police youth division detective said.

The program has shown a large increase in the number of young people arrested, according to fire officials, who noted that 59 youths were arrested in 1983, but in 1984 the number rose to 97. The program began last August.

Authorities said they were spurred to toughen their response because many of the youths' parents were apathetic to the problem, and the county's independent fire departments, which have large volunteer staffs, were unable to provide the individual counseling for the youths that many other localities in the nation have used.

According to Pamela McLaughlin, founder of the San Francisco-based National Firehawk Foundation, Montgomery's procedure of arresting children for arson is "very unusual. They Montgomery County are probably the only ones in the country doing it."

The Firehawk juvenile arson treatment program, which has set up 60 affiliates including those used by the Prince George's and District fire departments, pairs a juvenile with a fire-setting history with a local firefighter who has volunteered to teach the child fire safety and prevention and spend time with him in recreational activities such as going to ball games. Under the Firehawk program, psychological therapy also is sometimes recommended.

Juvenile arson programs in Northern Virginia are less structured than either the Firehawk or Montgomery County programs. Fairfax County conducts a one-time fire safety class and makes referrals to county mental health agencies.

McLaughlin praised Montgomery's required psychological treatment and longer follow-up time period, but said arresting the child is unnecessary. By the time a typical juvenile arsonist is caught setting a fire, most parents, frustrated with previous law-breaking or abnormal emotional behavior, are cooperative and want help, she said.

But Mary Marchone, director of Operation Extinguish, said many parents in Montgomery County were not so cooperative and did not seek recommended psychological treatment for their children before the program was established. Parents also minimized what their child had done, Marchone said, like one mother, whose son had set fire to a vacant town house, who said: "But it was only a vacant town house."

The arrest "will get people to take a little more serious look at the offense," said Ramon F. Granados, director of the county Department of Fire and Rescue Services.

The new program places a stronger emphasis than in the past on developing recreational and social habits, an important element in the treatment of a juvenile arsonist, said Jude Marston, a Bethesda social worker who conducts the psychological evaluations.

A typical juvenile fire setter, of which 80 to 90 percent are boys, is a shy loner with poor verbal skills, she said. "Overwhelmingly, the kids say they set a fire 'because I was bored,' " Marchone said.

The children who set fires, she added, either have too little or too much supervision at home and are asking for limits or releasing frustration at not being able to meet high parental expectations. They also often come from homes where the father is absent.

Often, a family crisis or upheaval such as divorce, a new baby or remarriage will precede a fire that youths set to refocus attention on themselves, Marchone said. She cited a case in which a young girl grew jealous after her mother remarried and had a new baby, and lit a candle under the baby's bed.

Montgomery officials said it is too soon to determine the success of their program, but police detective O'Donnell said none of the children in the program has returned to her as some did in the past because of another fire or law-breaking offense.