Two members of a terrorist group were convicted today of gun possession and riot charges in connection with the murder of U.S. Ambassador Rodger Davies three years ago.

Murder charges against the defendant were dropped June 3, to the dismay of U.S. diplomats here who had hoped to obtain homicide convictions against the two men, both members of the extreme right-wing group EOKA-B. There have been few prosecutions of terrorists for actions against American diplomats.

Davies and an embassy secretary were fatally shot during a demonstration outside the embassy protesting alleged U.S. bias toward Turkey, which had invaded Cyprus.

The U.S. government has actively sought convictions in the case. American diplomats view the course of the trial both as an indicator of President Makarios' attitudes and as a possible international precedent for action against terrorists, particularly when U.S. diplomats are the target.

The Cypriot decision to bring the case to trial was widely seen here as partly a political decision by Markarios, who wanted to strengthen the Carter administration's support for his government in negotiations with Turkey over the divided island's future.

When the murder charges were dropped, some observers said Markarios may have decided to put higher priority on domestic political considerations, since the talks with Turkey were making little progress.

Sentences will be handed down Tuesday against Ioannis Ktimatias, 39, convicted of illegal use and possession of firearms, riot and property damage, and Neoptolemos Leftis, 50, convicted of illegal possession of firearms and riot. Ktimatias, a former policeman, faces a possible 15-year sentence, while Leftis could be sentenced to eight years.

Neither man had to answer questions under oath about the murder of Davies because the murder charges were dropped for lack of evidence.

Judge Demetri Demetrious, who presided over a three-man panel, said each man had gone to the U.S. embassy on his own initiative armed with automatic weapons. Khtimatias was seen firing at the building.

In unsworn statements, Khtimatias said he was working for a Greek army officer in the military intelligence section of the Cypriot National Guard then run by officers loyal to the Greek junta. Neither his nor Leftists' testimony shed any light on whether they were part of a conspiracy.

Both men were close associates of Nicos Sampson, the EOKA-B leader of the anti-Makarios coup that triggered the Turkish invasion. Sampson is serving a jail sentence for his role in the coup, and EOKA-B appears to be under extensive pressure now from the Makarios government.

Khtimatias, part of the larger FOKA-B contingent that has traditionally existed in the police here, is already serving a sentence for illegal gun possession. His early conviction was apparently part of Makarios' gingerly purge of rightists.