A local peace group and several inner-city ministers said yesterday they would try to launch a boycott of the Sheraton Washington Hotel if its managers contiune to allow military groups to hold arms exhibits there.

The activists gathered in a press conference in front of the hotel to ask its management for a final time to cancel a convention and arms exhibit by the Air Force Association, scheduled for the hotel in September.

"The Sheraton Washington Hotel should be a place for family and group joy . . .," said the Rev. Horace McKenna, from St. Aloysius Church in the Distict. "But this intended war show would turn the Sheraton into a bargain basement for death, destruction and annihilation."

The Rev. Jack Woodard of St. Stephen and the Incarnation Episcopal Church, asked the hotel's management to "refuse to turn a profit by providing space for an obscene bazaar of killer weapons next month. . . The poor from whom federal budget money is being taken to be spent on these very weapons cry out to you."

The management of the hotel was not availiable for comment. Asked if the Air Force group would consider moving, William Bellanger, the group's convention manager, said, "My God, no. We certainly wouldn't even consider canceling."

The military groups have been holding the conventions at the hotel, now a subsidiary of ITT, a convention exhibitor, since 1963. Peace groups began protesting the conventions, which are closed to the public, last year, when they said displays of nuclear weapons components were added. That protest ended with the arrest of 19 demonstrators.

Similar protests in recent years have led to the cancellation of conventions in Chicago and Anaheim, according to Mernie King of Sojourners, the peace group that called the press conference.

King said if the convention goes on as planned, her group will begin writing religious and secular groups, asking them to cancel their conventions at the Sheration. Because of the time lag in convention planning, King said, the effects of the boycott would not be felt until September 1981 at the earliest.