Take a look at a picture book. Handsome gifts for children. Like a good story, picture books never seem to grow old to children. The selection this Christmas includes two carol books to sing in the Yuletide, as well as a menagerie of richly illustrated animal stories. Diane Manuel reviews the best of the season.

Books on Christmas ``Tomie dePaola's Book of Christmas Carols,'' selected and illustrated by Tomie dePaola, gathers together 32 traditional favorites. Small sopranos especially will enjoy the colorful foldout pages that tell the stories of ``Silent Night,'' ``I Saw Three Ships,'' and others. G.P. Putnam's Sons, New York, 82 pages, $17.95, all ages.

Another bright note is struck in ``What A Morning! The Christmas Story in Black Spirituals,'' selected and edited by John Langstaff, illustrated by Ashley Bryan. Five spirituals recount the Nativity stories in sunbursts of colors, with simple arrangements for singing and piano and guitar chords provided by John Andrew Ross, a well-known black composer. McElderry Books/Macmillan, New York, 32 pages, $12.95, all ages.

``Daniel's Gift,'' by M.C. Helldorfer, illustrated by Julie Downing, tells the story of a young shepherd boy who recovers his prize sheep from a trickster one night and is led to follow a great star to Bethlehem. Pastel watercolors and decorative borders that derive from the ``Book of Hours'' add to the comforting tone. Bradbury/Macmillan, New York, 32 pages, $13.95, ages 4 to 8.

A final, more whimsical seasonal title ought to become a yearly favorite. ``An Early American Christmas,'' by Tomie dePaola, shows how a 19th-century German family might have celebrated Christmas in New England, dipping bayberry candles and baking traditional pretzels. DePaola's bright folk-art style is made for the cookie cutouts here. Holiday House, New York, unpaged, $14.95, ages 3 to 8. From Goldilocks to Growltiger

``17 Kings and 42 Elephants,'' by Margaret Mahy, illustrated by Patricia MacCarthy, is as joyful a nonsense poem as has come along in several years. Who knows where the parade is going? Certainly not the colorful jungle animals that turned out and ``bibble-bubble-babbled to the bing-bang-bong!'' A bright batik trip through a delightfully silly tropical paradise. Dial, New York, unpaged, $10.95, ages 4 to 8.

Yet another hullabaloo is heard in ``Growltiger's Last Stand and Other Poems,'' by T.S. Eliot, illustrated by Errol Le Cain. As Growltiger serenades his lovely Lady Griddlebone and the Jellicle cats ``practice their airs and graces,'' a new generation of readers will dance the night away with these three selections from T.S. Eliot's ``Old Possum's Book of Practical Cats.'' Farrar, Straus & Giroux, New York, unpaged, $12.95, ages 3 and up.

A favorite nursery tale takes on new dimensions of detail in ``Goldilocks and the Three Bears,'' retold and illustrated by Jan Brett. Brett seems to outdo herself with each new book she illustrates, and this ornate retelling is no exception. Dodd, Mead, New York, 32 pages, $13.95, ages 3 to 8.

``Owl Moon,'' by Jane Yolen, illustrated by John Schoenherr, takes readers deep into the Maine woods. When a little girl and her father go ``owling'' one winter night, they ``don't need words or warmth or anything but hope.'' What they finally find is worth the sometimes scary trek. Philomel/G.P. Putnam's Sons, New York, 32 pages, $13.95, ages 2 to 6.

In ``The Castle Builder,'' by Dennis Nolan, a young boy builds a whopping sand castle that's as big and soaring as - well, his imagination. The author/illustrator's black and white pointillist drawings make the castle look so real that one has to wonder if Sir Christopher, Tamer of Dragons, didn't scale the tower after all. Macmillan, New York, 32 pages, $12.95, ages 5 to 8. Equally as imaginative a book is ``Five Secrets in a Box,'' by Catherine Brighton. As Galileo's young daughter, Virginia, tells us what she finds one day among her famous father's scientific papers and instruments, we get a glimpse of Renaissance richness in the muted watercolor illustrations. Dutton, New York, 32 pages, $11.95, ages 4 to 8.

``Knots on a Counting Rope,'' by Bill Martin Jr. and John Archambault, illustrated by Ted Rand, takes place around a campfire as a young Indian boy listens to his favorite story - his grandfather's tale about the night he was born and the victories he has won since then despite his blindness. Henry Holt, New York, unpaged, $12.95, ages 4 to 8.

Finally, there's ``Rainbow Rhino,'' by Peter Sis, in which a rhinoceros and his good friends, the rainbow birds, join forces to explore the world beyond their own valley, only to find that home really is the best of all. An intriguingly colorful, yet subdued. adventure. Knopf, New York, 40 pages, $11.95, ages 3 to 6.

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