The Justice Department says it has found insufficient evidence that D.C. police used excessive force in arresting 192 Iranian student demonstrators during a violent clash downtown on July 27, 1980, and has closed its investigation of the incident.

In a Sept. 23 letter to the police department, Assistant Attorney General William Bradford Reynolds, head of the Justice Department's civil rights division, said Justice had closed its investigation of the incident and no action would be taken against the police. He added, however, that the case could be reopened if Justice receives any additional information on the incident.

Assistant D.C. Police Chief Marty M. Tapscott said yesterday he was pleased with the Justice Department action but noted the police department's own internal investigation of the incident is continuing.

The Justice Department investigation, conducted in part by the FBI, began a year ago after several news accounts of the demonstration and arrests, during which at least 35 persons were injured, raised questions about the conduct of some of the police officers.

Lawyers for the demonstrators also filed a complaint with the Justice Department, charging that local law-enforcement authorities violated the constitutional rights of the demonstrators.

An attorney in the firm of Abourezk, Shack and Mendenhall, which represented the demonstrators, expressed disappointment with the Justice Department's action yesterday. "In our opinion, on July 27, 1980, members of the Metropolitan Police Department acted in an extremely questionable manner," said the attorney, who asked not to be identified.

He said the FBI did not interview any of the 192 arrested demonstrators. "The pertinent question is whether the United States government has fully and impartially conducted an investigation of potential violations of law or whether that investigation has been adversely influenced by the fact that the victims are associated with a government which is currently at odds with the United States," the attorney said.

The demonstration involved about 1,500 Iranian demonstrators from four separate groups. The major demonstration was sponsored by the Iran Freedom Foundation, a group opposed to the current Iranian regime and its religious leader, Ayatollah Ruhollah Khomeini, but three other groups, including both Marxist and pro-Khomeini factions, held counterdemonstrations.

When the rival groups refused to move on, D.C. and U.S. Park police waded into the crowd and started making arrests. At least two police officers were injured in the melee