The 12-year-olds were bent over the water, staring at its surface with glum concentration. It was high-anxiety time. There were fish in the water worth money and prizes, including a free vacation to Disney World. And these kids were still trying to catch bait.

"They're too fast," said Marcus Summers, who had a plastic bag attached to his hook where a worm should have been. He and his friend Troy Jessup, who was dragging a leather pouch through the water, were trying to trap minnows and tadpoles against the concrete walls of the Tidal Basin. Between them stood Roland Penny. He had come with his friends from Southeast Washington, dreaming of big fish and prizes. Now, in the shadow of the Washington Monument and the Jefferson Memorial, he despaired.

"We can't catch any fish until we catch the bait," said Penny. "And they're harder to catch than the fish."

Fishing without bait is usually a chore. But this week, with thousands of rookie and veteran anglers competing in a fishing contest along the Potomac River, the Tidal Basin and the C&0 Canal, the fish can afford to be particularly choosy.

The Channel 7 Fishing Derby, with prizes ranging from soccer balls and fishing tackle to a new bass boat, has lured a crowd to water's edge. It began Friday with a speech by Mayor Marion Barry and music by the Air Force Band. It will end next Monday with the presentation of prizes and local bragging rights.

The fishing contest is just part of the first Waterfront Celebration, a 10-day festival sponsored by city and federal agencies. Other events will include sailboat races, seafood tasting and live music along the Maine Avenue waterfront in Southwest Washington.

The whole package is designed to advertise the Potomac as a clean, healthy place to fish and recreate in general. And with the reputation the Potomac has suffered in decades past, it needs all the public flattery it can get.

"I always thought of the Potomac as a nice sewage dump for the city of Washington," said Dick Kotis, a nationally prominent bass fisherman who had his opinion changed earlier this summer. Now, he said, "I'd like to spend a couple weeks here."

The Potomac may not rival Pennsylvania's limestone streams for purity, but in the last 10 years it has improved to the point where an angler fishing under the 14th Street Bridge can now catch a dozen varieties of fish, including the coveted black and striped bass.

It cost $1 billion to get it that clean. And officials who played a role in its revival are now anxious for the river to generate some income in return.

"Why should people go all the way to Chesapeake Bay to fish when we can put them on a charter boat right here?" said Paul Leach, an official with the Department of Commerce's National Marine Fisheries Service. "We can probably guarantee them more protein here than down in the bay."

Leach is a member of the Washington Area Waterfront Action Group that meets every two months to plot ways to turn Washington into an urban fishing center. Some of the projects being considered are public fishing piers and swimming beaches on the Potomac and Metro fishing maps to be distributed on subways and buses that indicate stops within walking distance of good fishing areas.

"I drive by here every day and I didn't know you could fish here," said Hoke Glover, a federal government worker who spent Saturday fishing the Tidal Basin with his 12-year-old son. "I didn't know there were any fish in here."

Neal Van, who grew up in Southwest Washington, didn't have to be told about urban fishing. On Friday, Saturday and Sunday morning last week, he and his 15-year-old son, Hank, drove from Chesapeake Beach, Md., to the Tidal Basin to fish. That represented a total turnaround from the normal migration of fishermen from Washington to the bay. It proved successful for Van, who caught one of 35 tagged catfish and won a new rod and reel.

"I wish I could catch one of those fish. I could use some money," said Pelcie Dockery, an 80-year-old Washington native who has been fishing the Potomac and the Tidal Basin since 1943. Saturday, he stood behind five fishing poles he had baited with liver and worms, patiently untangling a knot of line and professing love for his fellow anglers. "There's enough fish in here for all of us."

At the weigh-in station, just behind the paddle boat concession on the basin, Lucian Norman, a civil engineer with the Army, was weighing in a one-pound largemouth bass he caught near Roosevelt Island in the Potomac. His 14-year-old son, Jim, looked less pleased than his dad.

"He usually beats me 10 fish to one," said the elder Norton. "But I beat him today."

While Norton's fish was being recorded for posterity, Ruth Ford sat in her aluminum lawn chair, holding a rod that hadn't enjoyed so much as a nibble in hours. Ford said she has been fishing the Tidal Basin for more than 40 years, long enough to learn how to cope with failure.

"That's fishing," she said, tugging a white sweater around her shoulders. "That's just fishing."