Interior Secretary James G. Watt has banned rock music from this year's Fourth of July celebrations on the Mall because of his concern that it is attracting "the wrong element"--drinking, drug-taking youths.

Instead of such groups as The Beach Boys and The Grass Roots--lead entertainers for the past three years--the Mall this year will reverberate with "patriotic, family-based entertainment" by the U.S. Army Blues Band and Las Vegas crooner Wayne Newton, Watt said in an interview.

"We're trying to have an impact for wholesomeness," he said. ". . . Now on, July Fourth will be a traditional ceremony for the family and for solid, clean American lives. We're not going to encourage drug abuse and alcoholism as was done in the past years . . . It's going to be the military people with their patriotism, and Wayne Newton."

Newton, a strong supporter and friend of Ronald Reagan and one of the highest-paid entertainers in the country (he makes an estimated $12 million a year as a Las Vegas performer), will donate his performance here, according to Alan Margulies, president of Flying Eagle Inc., Newton's corporation. Margulies said Newton would bring his own 25-piece orchestra and that his performance would be televised.

"It's not every day a performer gets to perform before half a million people," Margulies said. ". . . We're going to come in there July 2 and be there for the entire festivities. Wayne will be the grand marshal of the parade . . . One of the great things about Wayne Newton being involved is the Indian nations are coming out en masse" to Washington for the event. Newton is of American Indian descent.

Asked how Newton's music would differ from previous Fourth of July concerts, Margulies said The Beach Boys' repertoire tends to be limited to 1960s surfing music, "whereas Wayne has really run the gamut . . . He can do country as he can do rock as he can do ballads . . . middle-of-the-road . . . pop. There's really no limit to what he can do and does do."

Newton's big hits have included "Danke Schoen," "Red Roses for a Blue Lady" and "Games That Lovers Play." However, outside the Las Vegas club circuit, Newton has not been a big draw; last summer, he was unable to fill the 10,000-seat Merriweather Post Pavilion in Columbia, Md., which normally sells out for rock concerts.

In 1980, Newton testified before a grand jury investigating underworld extortion threats against him. In 1981, then-Nevada Gov. Robert List offered Newton assistance if needed because of reports of Mafia threats on the singer's life, saying, "It is disgusting that this fine man and his family are subject to this kind of abuse."

Watt, who is in charge of the National Park Service, which runs the July Fourth celebration and spectacular fireworks display attended by hundreds of thousands annually, said he decided to change its tenor because of "repulsive" reports in the past two years of "high drug use, high alcoholism, broken bottles, some injured people, some fights."

A Park Service spokesman said U.S. Park Police arrested 52 adults for offenses ranging from disorderly conduct to assault during Fourth of July activities here last year. Many of these were at a "smoke-in" in Lafayette Park conducted by 500 persons protesting what they called repressive enforcement of marijuana laws.

"The reason for the arrests and other trouble , we concluded, was that we had the rock bands attracting the wrong element," Watt said, "and you couldn't bring your family, your children, down to the Mall for a Fourth of July picnic in the great traditional sense because you'd be mugged by . . . the wrong element, whatever is the nice way to say it."

Apparently Watt hadn't acted to change the type of music played on the Mall during the past two years because he and his family had viewed the celebrations and fireworks from the top floor of the Interior Department building at 18th and C streets NW, where they were informally entertaining friends and employes.

"It is amazing. You just don't realize. Up here you can't really hear the music," said Leilani Watt, the secretary's wife, who participated in the interview.

"It's hard rock," said her husband.

In the lexicon of rock, the secretary is not technically correct: Hard rock means loud guitars, heavy drums, a hard beat and frequently high-pitched vocals. The Grass Roots, last year's top group in an afternoon of music on the Washington Monument grounds before the fireworks, plays light, melodic pop-rock, as do The Beach Boys.

Clearly, however, both groups appeal to youth, while Wayne Newton's repertoire is pitched at an older crowd. "In the past couple of years we've had groups that I guess appeal to the younger set," said a Park Service spokesman. "This year what we're really trying to do is have groups that appeal to a wide range of ages, and family."

The National Symphony Orchestra will again perform on the Capitol grounds, as it did last year. And there will be other groups sharing the spotlight with Newton on the Mall. Last year, The Grass Roots were joined by the Jhoon Rhee Martial Ballet, the Jefferson County (W. Va.) High School Jazz Band, Tim Eyermann and the East Coast Offering, the United States Air Force's Tops in Blue, and a two-hour variety show.

Leilani Watt said she learned of the rock music after last year's Fourth of July festivities by talking to someone who was on the ground. Watt said he learned of drug use and other problems from newspaper accounts.

He sent a memo last Nov. 18 to Manus J. Fish Jr., regional director for the Park Service, blaming "rock concerts" for the problems and saying, "It is imperative that next year we get entertainment that will point to the glories of America in a patriotic and inspirational way that will attract the family."