Hi - great question! Some schools REQUIRE participation, but I am opposed to doing this. First, you need to have reasonable guidelines and provide support. One guideline I recommend is to accept projects by teams of two, not just individuals. Second, you might help by providing free poster boards (cheaper when purchased in bulk), and provide examples, like on your school website. Last, you need to do is to provide some incentive. I don't like prizes for winners but you could provide ALL entrants something, like a certificate of participation along with a coupon to a free milkshake at some local establishment. Hope this helps! Good luck!
One way to do this is perhaps hold a small assembly explaining what being in the science fair entails. To get them interested further maybe a small experiment (i.e. exploding volcano, etc) to get them intrigued may do the trick. You can also make the students aware that prizes can be awarded for the top experiments, if you choose to have them of course.
Well considering that I was in elementary school only about 3-4 years ago I know that alot of the students wouldn't participate at times unless there was something in it for them so many of the elementary schools that i used to attend would have a reward in store for the children for participating.
Like the previous answer, I think the best way would be to engage the kids in a small scale experiment or show them successful experiments such as those found on Steve Spangler science. My 9 year old writes a blog in which he includes many small scale science experiments. Kids love to get involved and help out with his projects because they see him having fun and realize that it isn't as hard as they thought. That always leads to the ubiquitous "why?" questions. Kids don't participate because the concepts seem too big or too complicated and they don't know where to start. Show them how they can do it and let them loose.
The suggestions above are great, but also get the science teachers involved. Have them promote/advertise it in class, see if they are willing to lend a little moral support or advice to those students who are interested in participating.Good Luck!