As more than 3,000 students, parents and D.C. school officials rallied on the steps of the District Building yesterday, chanting and launching balloons to urge city officials to give the schools full funding, several city officials said they they were "sure" they could find additional funds for education.

The demonstrators, led by school Superintendent Floretta D. McKenzie, several school board members and a parents lobbying group, briefly stopped rush hour traffic in the 1300 block of Pennsylvania Avenue NW to release hundreds of green balloons symbolizing their demand that the City Council approve $396 million requested by the school board.

The demonstration was the latest round in the struggle between school officials and the District Building over school funding for the fiscal year that begins Oct. 1. The council's Education Committee voted last week to recommend a $382 million budget for the schools, which is $2 million more than the amount recommended by Mayor Marion Barry. But school officials protest that the additional $14 million is needed to start new programs, hire new teachers and reduce class size.

Yesterday, Council Chairman David A. Clarke said in an interview that he felt "sure" the full council would vote next week to increase the school budget beyond the $382 million. He said he had found several places in the city budget from which the council could draw funds, including savings from delays in filling positions, lower gas and fuel prices and lower than anticipated inflation and telephone costs. He also said the council could find some extra money by recalculating the city's interest on its short-term borrowing.

A high-ranking Barry administration official, who asked not to be named, said, "It's clear that they the school system will get more money." The official predicted that the council would increase the proposed school budget by $3 million to $4 million.

Council member Hilda Mason (Statehood-At Large), chairman of the Education Committee, told the crowd of the efforts to find more money. The rally was sponsored by Parents United, but received enthusiastic support from school officials and administrators who helped arrange buses to transport students and negotiated with city officials for parade permits. A spokesman for the parents group said the rally was part of a continuing campaign to persuade Barry and the council to "give the schools what they need."

"We cannot have a great city without a great school system," said McKenzie, addressing the rally dressed in pants and a baseball cap emblazoned with a dollar sign. McKenzie said last week she might quit because of the "inadequate" funding recommended by the mayor and council.

Monica Jones, the school board student representative, was cheered by the crowd when she told them that she had a message for "the mayor, who puts his son in a private school: Stop talking trash and . . .give us the cash."

Wallace Southerland, 16, a junior at the School Without Walls, asked the crowd, "Aren't you tired of low SAT scores? Aren't you tired of working under ceilings that leak . . . . We need some money."