Soviet leader Mikhail Gorbachev will stay at the Soviet Embassy on 16th Street NW and his entourage will stay about a block away at the Madison Hotel during next week's summit -- assuring tight security and some blockaded streets in the District's crowded downtown section.

The highest-ranking members of Gorbachev's party will stay at the Madison at 15th and M streets NW, according to Madison owner Marshall Coyne. About 50 members of the Soviet press, some of whom are already in Washington, will stay around the corner at the Vista International, at 1400 M Street NW, according to a Vista spokesman. Arrangements for both stays were made by the Soviet Embassy, officials said.

Gorbachev and his wife, Raisa, will stay at the beaux arts-style embassy building at 1125 16th St. NW, according to White House officials.

The Madison apparently was chosen by the Soviets because of its reputation and experience in dealing with foreign dignitaries and its location one block from the embassy, a former White House official said. "This deal was sealed by proximity," the former official said. "Just take a look at the Soviet Embassy and take a look at the Madison. It is the nearest major hotel."

The Madison has a long history of catering to foreign leaders, including those under tight security, as the Soviet party is expected to be. During negotiations that surrounded the signing of the Camp David Accords in September 1978, Egyptian President Anwar Sadat and Israeli Prime Minister Menahem Begin stayed at Camp David, but other top-ranking officials in their parties took up residence at the Madison.

"We had the Egyptians on one floor and the Israelis on another floor," said Coyne. "Don't ask me who was on top. I don't remember."

Coyne exhibited the requisite reticence when discussing the upcoming visit, refusing to discuss how many Soviet guests would stay in his 400-room hotel or the elaborate on security measures that are expected to be taken.

"Our hotel is doing this every day practically," Coyne said. "We have an organization set up for it, so it becomes sort of routine, though for the United States this is an important visit."

Knowledgeable sources said the entourage at the Madison may include some from the Soviet Central Committee, which includes about 300 top Communist Party officials, and the ruling Politburo, the inner group of senior party leaders.

Sources said it was unclear whether Soviet Foreign Minister Eduard Shevardnadze would be staying at the Madison or the embassy. They speculated that the hotel would be the most likely choice to give Gorbachev and his wife privacy at the embassy, which they said is rather small.

One source said that the Soviets had wanted to reserve the entire Madison Hotel, in part, for security reasons. However, owner Coyne was unable to accommodate them on such short notice because some long-time guests with reservations could not be transferred, said the source who is knowledgeable about the preparations.

"He tried to be as accommodating as he could," the source said. "But this visit was late {in being scheduled}. Normally there is six months to plan . . . . Finally the Soviets agreed to a compromise where they would get the major amount of rooms."

Coyne refused to discuss that aspect of the visit, saying only there would "of course" be other guests at the hotel.