Stand on a corner in Mount Pleasant, a little neighborhood two miles from the White House in the middle of Northwest Washington, and the contrasts are kaleidoscopic.

On the main drag, Mount Pleasant Street, white children kick a soccer ball in front of El Progreso Market while silent Hispanic women size up the chorizo inside.

On another block, you can buy videos from Africa or Central America; on the next, barbecued ribs and corn bread from a restaurant owned by a Korean immigrant. A Salvadoran restaurant serves pizza, its owner is Iranian.

In a city where skin-color lines are sharply marked and only occasionally breached, Mount Pleasant is an extraordinary exception.

With roughly equal proportions of black, white and Hispanic residents, the neighborhood is the most ethnically diverse in the city, according to the most recent demographic information available on the Washington area.

Even that bald superlative doesn't quite capture its full breadth: "black" here means Jamaicans, Haitians, African Americans.

"Hispanic" describes residents from Guatemala, El Salvador, Cuba, Puerto Rico, Mexico. There are Koreans, Vietnamese, Chinese, Guy anese and numerous white ethnicities. On Sunday mornings, mass is celebrated three times at the local Catholic church -- in English, Spanish and Creole.

But while the races live among one another in Mount Pleasant, they hardly live together. Even in an urban melting pot, self-segregation and polarization often balkanize this half-square mile of city turf.

More than race or language, the gulf between the haves and have-nots separate this neighborhood. Half of the families here earn less than $25,000 a year; a quarter earn more than $50,000, a gap that has widened slightly during the past decade. Stroll along Mount Pleasant's shady streets and the disparity is plain: the predominantly Hispanic residents of one decaying apartment building started a rent strike earlier this year to protest rodent infestation and periods without electricity and heat. One block from this eyesore, a real-estate office advertised: "Newly renovated five-bedroom, 2 1/2-bath town house with fabulous original details. New marble baths, central air conditioning, designer kitchen, washer/dryer ... $2,000/month."

This is a neighborhood where 10 Latino teenagers, separated from their families, find refuge at a local social service organization. It's also one in which an upper middle-class resident enthuses about her block: "I love walking around and hearing the sound of all the hot tubs."

Mount Pleasant's intricate social and economic weave make it a case study of the problems -- and possibilities -- of living in an integrated neighborhood. From interviews with residents, city officials, business owners and sociologists, one central point becomes clear: Mount Pleasant is a neighborhood at a crossroads. On one hand, it is growing whiter and wealthier with gentrification. On the other, it is a place where the poor and struggling are finding it more difficult to get by as gentrification pushes up rents and shrinks the amount of available housing.

The question is, can Mount Pleasant's delicate balance be preserved?

Visible Flash Point The most visible flash point in Mount Pleasant is the neighborhood's business district, a four-block stretch of Mount Pleasant Street. A collection of simple mom-and-pop stores, the main street has become a repository for the neighborhood's conflicting agendas and a symbol of its gnawing tensions.

How one views this street -- indeed, how one views much of the activity in Mount Pleasant -- depends largely on the racial or class prism through which those views are filtered. For the past year or so, some residents have waged a campaign to "clean up" Mount Pleasant Street. To the predominantly white group of homeowners who have led this campaign, "clean up" is literal and figurative. It means collecting the trash and remodeling the storefronts and also clamping down on the anarchic behavior that occasionally breaks out -- drunken fistfights and public urination, aggressive panhandling, littering.

Residents like Alice Kelly, a member of the quasi-governmental Advisory Neighborhood Commission (ANC) that has tried to address the issue, blame the problems on the easy availability of alcohol. By a recent count, 21 of the 54 businesses on Mount Pleasant Street are licensed to sell liquor, and Kelly said some have done so to already inebriated patrons. "All we are asking them to do," she said, "is follow the law" against selling alcoholic beverages to intoxicated individuals.

To some black and Hispanic residents, and to many of the eclectic group of shop owners on the street, however, the advisory group's campaign is seen as a pretext for pushing out lower-income people and the merchants who serve them. Hispanic merchants operate 21 of the businesses on the street, Koreans eight and blacks seven, with the balance spread among a multiethnic smorgasbord. The prospect that Mount Pleasant will go the way of Adams-Morgan, its noisy, more commercially gentrified neighbor to its immediate south, understandably arouses strong passions among Mount Pleasant's shop owners, many of whom already live close to the financial edge.

"The white people try to make all the rules in this neighborhood, but they don't contribute one dime to the businesses on this street," complained Mark Peters, a young Iranian immigrant who owns the Trolley Stop restaurant on Mount Pleasant Street. "It's the biggest hypocrisy. Without the Hispanic people, we'd all be out of business in two days."

Few here debate the existence of an alcohol problem, just the remedies. A complicating factor is that Mount Pleasant's most visible alcohol abusers are its Hispanic men, who congregate outside apartment buildings and drink together in the parks at either end of the neighborhood. ("Prohibido las reuniones," warns a common sign along the street, "No loitering.")

But some say the extent of this problem is exaggerated and distorted by fearful whites: "We've been here for years and we don't hurt no one," said a young black woman, sitting beside three drinking friends on Mount Pleasant Street. "They just don't know us, that's all." Added Jesus Sanchez Canete, a paralegal who has organized rent strikes among some of Mount Pleasant's Hispanic tenants, "If you see a drunk person who doesn't speak your language, you are doubly threatened. But these are not bad people."

Even if public drunkenness on Mount Pleasant Street could be contained, it's still questionable whether the neighborhood's more affluent residents would shop there. In addition to fears about personal safety, 59 percent of the homeowners surveyed recently by an association of area business owners said they refused to patronize local stores because of the stores' appearance and sanitation, the perceived lack of product variety and difficulties in parking. Clearly, many of these residents would openly embrace the commercial gentrification so feared by the merchants.

Ellen Jeurling, a white homeowner who until this year headed the neighborhood's architectural-preservation society, rolls her eyes when she talks about Mount Pleasant Street. "It's another world up there," she said, sitting in her beautifully restored home a few blocks from the main strip. Jeurling patronizes a few of Mount Pleasant Street's business, but complained, "There's too much fast food, too many liquor stores, no bank, no bookstore. I just want a bank and a flower shop and a nice restaurant."

There are several restaurants on the street and a bookstore that sells literature from the Third World, but Jeurling's point is left unspoken: These places don't appeal to residents like her.

The hidden hand of the marketplace may ultimately favor Jeurling's interests. The cost of commercial space on Mount Pleasant Street is on the rise and a few leases will soon be up for renewal. Some of these merchants say the next round of rent increases could drive them out of Mount Pleasant. There has been discussion but no action about a bank moving onto the street -- an ominous or a hopeful first step -- depending, as always, on the perspective.

Racial Frontier Demographically, Mount Pleasant sits on a kind of racial frontier. The heavily black communities of Park View and Columbia Heights lie to its east, the largely white neighborhoods of Cleveland and Woodley Park are to its west, across Rock Creek Park. Bustling Adams-Morgan, to the south, approaches Mount Pleasant's ethnic diversity but has neither as many wealthy residents nor as many poor ones.

Mount Pleasant's socioeconomic character has been shaped by three decades of dramatic human ebbs and flows, reflecting successive patterns of white suburban flight, black in-migration and more recent influxes of white professionals and Hispanics, many of whom fled civil wars in Latin America. By 1980, 49 percent of Mount Pleasant's 10,012 residents were black, 38 percent white and 13 percent were Asian or Native American (those of Hispanic ancestry accounted for 13 percent, though those in this group must declare themselves either black or white for Census Bureau purposes). The 1990 Census profile won't be available until next year, but residents repeatedly say the Hispanic and white populations were rising in the 1980s, with the proportion of black households declining.

The raw numbers, however, give little hint of how gentrification has subtly reshaped the neighborhood. One obvious area is housing -- or rather, the loss of it. As Mount Pleasant's multifamily houses and group homes have been renovated and converted into dwellings for wealthier couples and single families, the number of households has declined by more than 8 percent since 1980. A home in the neighborhood sold for an average of $232,991 last year, according to city records, twice the average sale price in Columbia Heights, a less gentrified community located just across 16th Street.

Mount Pleasant's housing patterns are mirrored by the widening divide between between rich and poor. The proportion of poor and lower-income households in the neighborhood has hovered around 50 percent for the past decade, according to the 1980 Census and projections developed by Claritas Corp., an Alexandria market-research firm. But the number of upper-income families (those earning more than $50,000 a year), climbed from 17 percent of the households in 1979 to 23 percent last year.

The newer homeowners have not only brought money to Mount Pleasant but their civic energy as well. White homeowners, people like Alice Kelly and Ellen Jeurling, dominate the neighborhood's important civic organizations -- the ANC (elected by area residents), the school-booster group, the architectural-preservation society, the neighborhood-watch program, the business association.

This sense of white dominance in civic affairs seems to weigh on Mount Pleasant's most active black leader, Ken Fealing, who serves as chairman of the ANC, the organization that represents the neighborhood before the District's government. A legislative analyst for a labor union, Fealing moved to Mount Pleasant seven years ago from Dallas, lured by its small-town atmosphere and its varied character. Frustrated by what he sees as the lack of minority participation at community meetings, Fealing occasionally visits the apartment buildings around Mount Pleasant to scare up greater tenant participation.

"As diverse as this neighborhood is," he said, "there's only a small segment that influences the politics here. That's been a big problem. A lot of people like the diversity, they like neighbors of different color, but you won't find a lot of good Samaritans out there to speak up for the low- and moderate-income people."

Like Fealing, Pedro "Pepe" Lujan often grows frustrated with the neighborhood's factionalism. A Peruvian immigrant who owns Heller's Bakery in Mount Pleasant and Avignon Freres restaurant in Adams-Morgan, Lujan was recruited by the formerly all-white business association to be its president. It was a shrewd choice: With a college education and 35 years residency in the United States, Lujan is one of the few Hispanics in the neighborhood with whom both whites and Hispanics feel comfortable.

Yet Lujan is a reluctant mediator: "You have a group of people who are professional, they have money, good jobs, good houses. These people know what they can do. They have the expertise and the experience. Another group are laborers who don't speak English well, who work full time and night time, and don't understand the American system. I see {Hispanic} store owners who can't even write a check. Now, how is that second group going to stop the other one from taking over?"

These days, the most unifying issue -- perhaps the only unifying issue in Mount Pleasant -- is crime. Residents have for several years complained about vandalism, car break-ins and other petty activities that, collectively, gave the neighborhood the unwelcome status as the most-incident prone in the Fourth District, a territory covering much of Northwest Washington. By last summer, this dubious status was raised to a new and terrifying level when a number of violent crimes occured -- three murders, a hostage-taking and a late night gunfight that had residents along Park Road diving across their houses for cover. One middle-class woman said that she frequently parked her car in no-parking zones near her apartment, amassing parking tickets in the process, rather than have to walk several blocks to her home after dark. Last August, she decided to leave the neighborhood for good.

But those who have stayed in Mount Pleasant were galvanized into action. Through an effort coordinated by the ANC, virtually every block was organized into a neighborhood-watch program last year; organizers last fall were able to get 1,000 signatures -- more than one in 10 residents -- on a petition demanding greater police protection. These efforts helped cut the neighborhood's overall crime rate by more than 25 percent; there were only two homicides in the past year, according to police records.

The Kenesaw apartments, a historic building in which Gen. Douglas MacArthur once resided, was the neighborhood in miniature. After a drug dealer was killed in the building's lobby, its black, white and Hispanic tenants started a voluntary patrol and pooled funds to hire a security guard. Said Randy Keesler, a social worker who lives in the building, "It sounds strange, but {the murder} sort of brought people together."

Whites Shun School Bancroft Elementary School, the community's public elementary school, is an imposing red-brick structure, brooding with its caged windows and crying for a fresh coat of paint. For the better part of its 66 years, Bancroft stood as the neighborhood's great assimilating institution.These days, however, white families with school-age children in Mount Pleasant shun Bancroft. The car pools that thread Mount Pleasant's side streets each morning ferry these young people to private and public schools located in the wealthier neighborhoods across Rock Creek Park.

As a result, instead of being Mount Pleasant's great common denominator, Bancroft reflects only a portion of the community around it. Its student body is 52 percent Hispanic, 40 percent black and about 6 percent Asian American, with nine out of 10 students qualifying for free or reduced-priced lunches.

White parents are adamant that their choice of schools is guided by their desire for better facilities and a more advanced curriculum than Bancroft can offer, not the racial mix of its student body. Bonnie Cain, a longtime Mount Pleasant resident, sent her son to a pre-kindergarten program at Bancroft five years ago and was dismayed that her son was placed in a class with 35 other preschoolers. Eventually, she decided to send her son to another school.

That decision genuinely troubles Cain, for she knows it appears ironic, if not hypocritical, to some of the parents who have stuck with Bancroft. For more than a year, Cain led a volunteer group called Community Helping All Mount Pleasant Students (CHAMPS), which attempted to set up a variety of programs at Bancroft.

Yet rather than being welcomed by the school, CHAMPS was viewed with suspicion and occasional hostility by the leadership of Bancroft's Parent-Teacher Association. Like Cain, most CHAMPS members are white. More crucially, the volunteer group is the successor to a panel of residents that wrote a sharply critical report about conditions at the school last year.

The report damned the school for being overcrowded and poorly maintained, and laid out a series of recommendations for the school administration and teachers. Its most hurtful tone, however, was reserved for criticism of the administration and the PTA. "All of {the} pieces of anecdotal information add up to what appears to be a complete and total disregard by the faculty and staff at Bancroft School of the community which they are intended to serve," concluded the report, which was written by Alice Kelly.

Denise Pearson, the current president of the Bancroft PTA and a lifelong resident of Mount Pleasant, is still resentful of the report, which she brands as unfair and "racist." To Pearson, the issue boils down to a complex question: Should those who have abandoned an institution criticize the people who have little choice but to work within it?

In some places, and perhaps all too infrequently, Mount Pleasant puts aside its factionalism, its seemingly irreconcilable differences. On the broken asphalt of Bancroft's playground, the neighborhood's most unself-conscious residents, its children, play together with careless joy.

A few blocks away, near the Rosemount child-care center, a facility serving families of all kinds, two adjoining street murals painted in fantastically vibrant colors stretch down Klingle Road. The panels, painted by a local youth organization, show scenes of interracial harmony and cooperation. In two panels, young faces -- red, brown, black, white and yellow -- are juxtaposed with the dawn breaking over the outline of Mount Pleasant's row houses.

It is an over-earnest image, but a visual reminder of Mount Pleasant's striving. Ken Fealing thinks about his neighborhood and said, "We're at a very vulnerable state right now. We have the potential to become a model neighborhood, or ... " Fealing doesn't finish the sentence. Indeed, in Mount Pleasant, it's hard to know which way the wind is blowing.

In a city where color lines are sharply marked, Mount Pleasant is its most ethnically diverse neighborhood: RACE

BLACK: 49.3 percent

WHITE: 37.9 percent

OTHER (ASIAN/PACIFIC ISLANDER/NATIVE AMERICAN): 12.8 percent

HISPANIC*: 13.1 percent INCOME

More than race or language, the gulf between the haves and have-nots separate this neighborhood of an estimated 9,500 people. Half of the families here earn less than $25,000 a year; a quarter earn more than $50,000. The average income is $30,803; the median, $22,226. HOME OWNERSHIP

The disparity easily can be seen in housing conditions: decaying apartments stand near elegantly renovated rowhouses. While 23.4 percent of households are owner-occupied, 76.6 percent are renter-occupied.

SOURCES: U.S. Census Bureau, Claritas Corp. (all figures 1988 estimates)

*Hispanics are included in census totals but are classified as either black or white. Thus, the black, white and other categories above total 100 percent.

@CAPTIOn; Mount Pleasant's business district, a four-block strip, is a collection of simple mom and pop stores. (This photo ran only in early edition.)