Thousands of homes and businesses here had their water turned off for two hours today, National Guardsmen trucked in tankers, filled with drinking water and schools stood empty as this community struggled to cope with an oil spill that threatened its water supply.

City health authorities, who ordered the water system shut off for fear it was polluted, lifted their ban this afternoon after deciding the city's 10-million-gallon reservior had escaped the ravages of a 63,000-gallon spill of heating oil into the Rappahannock River upstream of the city.

But the officials cautioned that the 10-day supply of water in the reservoir may not be enough to get Fredericksburg through the current crisis.

The Fredericksburg City Council voted unanimously tonight to ask Virginia Gov. John N. Dalton to declare a state of emergency. Mayor Lawrence Davies said such a declaration would "go a long way in getting additional equipment, additional funding and additional leverage within the community for conservation efforts."

More then 30 miles to the north, Fairfax County officials were more optimistic today that their water supply would remain safe despite an even larger spill of kerosene from the same pipeline that fouled the Rappahannock.

The Fairfax officials said they anticipated no health problems for the 660,000 people who get their drinking water from the Occoquan River, but said damage to fish and marine life was extensive along the headwaters of the river where 200,000 gallons of kerosene burst from a pipeline.

An Environmental Protection Agency official there said that "tens of thousands" of small fish had been killed by that spill. The EPA official, Thomas Massey, said he was "hesitantly optimistic" that the spill would not cause permanent damage to the Occoquan.

But in Fredericksburg there was concern about whether the community could wait for nature to purge the Rappahannock of the foul-smelling heating oil.

"I really don't think that [the 10-day water supply] will give us enough time for a cleanup," said Allen Hammer, a state water engineer. "We really have no idea how long it will take to clean it up."

Late this afternoon, National Guard units begin bringing 200 water tankers into the city to supplement the 10 million gallon supply, as city officials stressed that their previously announced state of emergency remained in effect. Typically the Fredericksburg area's 55,000 residents consume approximately 2.8 million gallons a day, but officials were hopeful that urgent pleas for water conservation could keep consumption below 1.8 million gallons daily.

Meanwhile, state, local and federal cleanup crews worked feverishly at the Rappahannock spill and the other one on Bull Run near Manassas.

"Our water supply is fine, and there's no danger," said James A. Warfield Jr., of the Fairfax County Water Authority. "Even if the kerosene were to work its way through the Bull Run Marina [where it is currently contained], it would still be a seven to 10 day trip to the county's water intake. We're optimistic there will be no problem."

Separate ruptures in the same pipeline owned by the Colonial Pipeline Co. of Atlanta caused both the oil spill and the kerosene spill last Thursday. In pipeline operations, a variety of fuels may flow through different segments of the same line at the same time, much as a freight train consists of a string of boxcars carrying different leads.

Officials of the pipeline company said this afternoon they are optimistic that 70 to 85 percent of the spilled liquid has been mopped up at both locations.

"We've been here every minute since this thing was discovered and we'll be here until it's over," said company spokesman James Sorrow. "I've been here so long I'm beginning to feel like I've been drafted.

Shellfish in the lower Rappahannock were being kept under surveillance although Virginia Gov. John N. Dalton said in a Richmond news conference today that oil-catching booms stretched across the river below Fredericksburg were doing an "excellent job" of catching the kerosene and preventing it from going downriver.

Dalton and Colonial Pipeline had admitted liability for the spills and noted that other companies responsible for spills in the past have paid the cost of cleanup and other expenses without the threat of being sued by the state. Company officials have put the cost of the cleanup "in the million-dollar category."

State health officials have received no reports of illness caused by the consumption of polluted water, and Health Department spokesman Charles Ford said today that the foul odor of the kerosene and heating oil makes it highly unlikely that such a thing could happen.

"I can't imagine anybody wanting to drink it," he said. "It smells terrible."

Ford said symptoms caused by ingestion of the polluted material would be similar to the flu, marked by respiratory and gastrointestinal discomfort. He added that it would take a large amount to cause illness.

Despite the frenzied cleanup efforts, some Virginia residents were less than pleased at the way the crisis was being handled. Stacy Hargrove, a Fredericksburg librarian, dashed to buy 40 gallons of distilled water when she heard warnings of the city's water cut-off this morning -- only to find the water running again two hours later.

"The store won't take the water back and I feel just a little foolish, grumbled Hargrove. "It isn't even Perrier."

Fredericksburg officials said neighboring Stafford County was expected to supply the city with 800,000 gallons of water daily but has been unable to because of water main breaks. City Manager John Nolan said a million gallons a day is being provided by Spotsylvania County and the city is examining the possibility of drawing from two fresh water ponds and a gravel quarry, which could provide more than 15 million gallons daily.

Still, Mayor Lawrence Davies warned that the city will have to make do with only about two-thirds of its normal water supply until the crisis is over. All public schools and many water consuming businesses will remain closed Tuesday, he said.

In Fairfax County, authorities laid in additional supplies of a carbon material that they said had been used successfully in the past to clear oilbased pollutants from water supplies. They also began continous monitoring of the water near the Northern Virginia water intakes of the Occoquan Reservoir.

Huge booms were moved into place in the Occoquan and Rappahannock rivers to contain the oil spills, as workers used flotation collars, vacuum trucks and skimming devices to remove the oil from the water's surface. According to a pipeline company spokesman, nine truckloads of fuel oil had been removed from the Rappahannock by noon today.

One estimate had more than 130 workers on the cleanup scene along the Occoquan alone, with specialists coming from the Navy, the Army Corps of Engineers, Coast Guard, and a number of other state, local and federal agencies.

Northern Virginia game warden John Berry and Don Ciccione, a manager for the Mason Neck Wildlife Refuge, found widespread indications of environmental damage on a brief canoe trip north from the Bull Run Marina. As the deadly rainbow sheen of kerosene filled the air with a heavy chemical smell, hundreds of small fish could be seen in the throes of asphyxiation.

"The stuff coats their gills and there is no way to save them," Berry said. "We've picked up six beavers so far and tried to scrub the kerosene from their fur, but five of them have already died."

Environmentalists from the Interior Department's Fish and Wildlife Service were being advised yesterday to destroy waterfowl that were captured "because the high toxicity of the kerosene makes survival very unlikely."

The environmentalists were armed with a sophisticated array of equipment designed to frighten wildlife away from the contaminated channel. including propane cannons that can scare geese, ducks and bald eagles from the water.

"We will be using large helium balloons, and shell crackers, shotgun shells that contain small firecrackers, and a whistlebombs in an effort to keep seagulls and other birds of prey from attempting to feed on the dead and contaminated fish," Berry said.