The structure and solvation free energetics of water under ambient and near critical conditions are studied with the Molecular Dynamics (MD) computer simulation method. By employing the truncated adiabatic basis-set description with 10 basis functions (TAB/10D), the water electronic structure variation both in and out of its molecular plane and associated polarizability effects are accounted for. It is found that the average dipole moment <(mu)over bar>(s) of a water molecule varies considerably with the thermodynamic conditions; while the TAB/10D model yields <(mu)over bar>(s) = 2.65 D under an ambient condition, it reduces to 2.24 D in supercritical water at temperature 673 K and density 0.66 g cm(-3). The MD results on the radial distribution functions and static and optical dielectric constants are in reasonable agreement with experiments. The fluctuations of the local electric field are found to be significant, so that at elevated temperatures, it can sometimes be in the opposite direction of the local water dipole vector. Also, the free energy curves associated with solvation of water molecules become tighter and more asymmetric with increasing temperature and decreasing density. The dynamic and spectroscopic properties of supercritical water are studied in the following paper [B. D. Bursulaya and H. J. Kim, J. Chem. Phys. 110, 9656 (1999)].