Complete the correct option 2 The students WAITED | WERE WAITING for the bus when it started to rain.

The correct answer is WERE WAITING.
Explanation: The sentence describes an action in progress when another action happened. The students were in the process of waiting for the bus when it started raining. 'Were waiting' is the past continuous tense, which indicates that the action of waiting was ongoing at a specific time in the past. The action of waiting started before it started to rain, so we use the past continuous.