In the paper an efficient numerical algorithm to predict the flow phenomena around the water-jet propulsion system was described. The potential-based flow analysis method was adopted to predict the velocity and the pressure on the inlet duct of the water-jet propulsion system. The method employed normal dipoles and source distributed on the solid surface such as the inlet duct and the tracked vehicle. The inlet duct and outlet open boundary surfaces were introduced where the sources and dipoles were distributed to define a closed boundary surface. The developed numerical algorithm was applied to a tracked vehicle propelled by the water-jet propulsion system with the different IVR(inlet velocity ratio). The results by the numerical analysis were compared with the experimental data in order to verify the feasibility of the proposed numerical algorithm.