Mayor Marion Barry yesterday moved his monthly news conference to the streets of the city, abandoning the climate-controlled comfort of his District Building conference room for the inner-city neighborhood around Hanover Place NW where he kissed babies campaign-style, shook hands and took credit for a massive drug sweep conducted there six months ago.

Answering questions under a red-and-white striped party tent erected in a vacant lot where dealers and junkies used to mingle, the mayor provided a detailed account of the city's Operation Avalanche drug bust, declaring, "We are committed not just to a temporary cleaning-up but a permanent solution."

The Hanover Place news conference afforded Barry an opportunity -- days after he announced his candidacy for a third term -- to display the results of a costly centerpiece effort by several D.C. agencies to save a narcotics-blighted neighborhood.

The drug sweep in December, which Assistant Police Chief for Operations Isaac Fulwood Jr. said cost $1.25 million in police overtime alone, was coupled with a D.C. Department of Public Works cleanup that netted more than 300 tons of debris, Barry said. In addition, the mayor said other city agencies have mounted a campaign to provide loans to businesses and residents in the area.

Barry, warning that the Hanover Place campaign is "not a panacea but it gives us an approach," said it would be difficult to replicate Operation Avalanche because of the enormous strain imposed on the city's manpower. The mayor also addressed several other issues, including:

*Public housing. Barry said the Department of Housing and Community Development would issue a report soon on the District's often-criticized public housing programs. Defending his record in the area, Barry said he expected 600 to 900 public housing residents to stage a rally in coming weeks to express their support for his efforts.

*Mass mailings. The mayor said he has heard no criticism from District residents about his city-financed "special message" mailings to citizens, noting that only "council members who want to be mayor" have raised objections. Yesterday, council member John A. Wilson (D-Ward 2) suggested in a letter to Department of Administrative Serivces Director William Johnson that Barry's letters may not conform to the criteria for permissible mass mailings by city officials.

*Mandatory sentencing. Barry said he had asked acting D.C. Corporation Counsel John Suda to study ways to close loopholes in the city's mandatory sentencing law for drug distributors. Barry, saying he favors mandatory sentencing "in some instances" and "flexible sentences" in others, complained that plea bargaining has led to easy treatment for some drug offenders.

Leading an entourage of aides, reporters and neighborhood residents on a tour of Hanover Place and adjoining streets, Barry paused to chat with passers-by, hoisting 2-year-old Warren Hale in his arms and ordering a deputy to enroll 15-year-old Lisa Moore in his Youth Leadership Institute. Barry cautioned a 24-year-old welfare mother carrying her 2-month-old son not to have any more babies until she finds a job.

Ordering a hot dog and drink at the Capitol Carry-Out store, 1306 North Capitol St. NW, the mayor pulled a roll of $100 bills from his pocket to pay for his lunch. Unable to find any smaller denominations, Barry turned to Police Chief Maurice T. Turner Jr. and said, "Got any change? I'll pay you back."

His tour of Hanover Place came to a close as Barry, noting that he used to eat "10 hot dogs a day when I was in college -- I love hot dogs," climbed back into his Lincoln and sped away.