"The policeman standing in the street is drinking water."

Translation: Policjant stojący na ulicy pije wodę.

[filip.jgl]

What is the distinction between na ulicę and na ulicy ?

[Jellei]

First is Accusative, the other is Locative (or Genitive or Dative, but with such a word, Locative is obviously more likely to be used).

Wychodzę na ulicę -- I go to the street (I'm at home and I'm going outside to the street just outside my home)
Idę na ulicę X -- I'm going to the X street

Czekam na ciebie na ulicy -- I'm waiting for you in the street
Policjant stoi na ulicy -- The policeman is standing in the street

First example doesn't mean that "na ulicę" or any of its forms is a general term for "outside" like in Russian, it's not.

[Garry_S]

"Поліціянт, стоячи на вулиці, п'є воду" - in Ukrainian it sounds almost the same!