*New York offers model of H1N1 for other big cities

*Summer camps, playgrounds may spread virus

By Joan Gralla

NEW YORK, June 12 (Reuters) - Cases of the new H1N1 flu virus are declining in New York, one of the U.S. cities hit earliest and hardest by the new pandemic virus, health officials said on Friday.

But New York mayor Michael Bloomberg said he worried that children may carry the virus to playgrounds while they are on holiday from school in July and August.

New York reported three more deaths from the swine flu on Friday, bringing the city's total to 16, with 567 hospitalizations -- by far the highest rate in the United States, which, with around 1,000 people hospitalized with H1N1, is the country with the most cases overall.

"While every hospitalization is concerning and every death is a tragedy, our surveillance data indicate that the number of people newly infected is declining," New York City Health Commissioner Dr. Thomas Farley said in a statement.

The World Health Organization declared a full pandemic of H1N1 on Thursday after confirming the illness was spreading out of control not only in North America, but in Australia. U.S. health officials estimate that hundreds of thousands of people are infected, although the WHO classifies the virus as "moderate."

The swine flu virus, first identified in two U.S. children in April, caused a cluster of cases associated with a New York school and then spread across the city of more than 8 million people. The U.S. Centers for Disease Control and Prevention said on Thursday the states with the highest H1N1 activity are New York, New Jersey and Massachusetts.