The Reagan administration yesterday stepped up federal involvement in the search for the killer of 19 black children in Atlanta, giving the city nearly a million dollars to involve Atlanta youths in the hunt and set up a 24-hour hotline to counsel parents and children.

"The senseless and brutal murders of these children is deeply and painfully etched in the consciousness of our people," President Reagan said in announcing the award at the White House. "I share the boundless hurt suffered by the stricken families and the community at large."

Attorney General William French Smith, in his first news conference, yesterday said that $650,000 of the $979,000 grant will come from Justice Department discretionary funds and will be sent to Atlanta by the Office of Juvenile Justice and Criminal Prevention immediately.

Smith said the remaining $329,000 will come from other federal agencies, but will be administered by the Justice Department.

He said the money will be used to involve in the search about 1,000 youths in six black sections of Atlanta where the 19 murdered children lived.

The new award brings to $1,250,000 the amount of federal funds awarded to Atlanta in the last month, not including manpower and other assistance from the Fbi and other federal agencies.

"We now have 26 special agents of the FBI assigned to help the Atlanta police," Smith said. "We are doing everything we can within our jurisdiction."

He also announced the formation of an eight-man task force, headed by former attorney general Griffin B. Bell, an Atlanta, and Illinois Gov. James R. Thompson, to study what the federal government can do to fight the rising tide of violent street crime.

Saying that murders, rapes, assaults and armed robberies had increased 59 percent in the last 10 years, Smith said the "alarming increase in the commission of violent crime raises a serious question whether the federal government is doing enough to meet its obligations to insure domestic tranquility."

Smith said he has given the task force 60 days to come up with recommendations on what the federal government can do under existing legislation, and until later this summer to make recommendations on what new legislation should be introduced.

Smith said, "Polls tell us that the public has mre concern over violent crime than any other it faces. The public would rather spend money in this area over almost any other federal program."

In answers to questions from reporters during his 40-minute news conference, Smith:

Acknowledged that he had conversations with Sen. Paul D. Laxalt (R-Nev.) over Laxalt's concerns about Justice Department strike force investigations of corruption in the Las Vegas gambling casinos. But, Smith said, "We've taken no actions and come to no conclusions."

Refused to discuss whether the FBI or the Justice Department has under way any investigations of Frank Sinatra's connections with organized crime, then hinted that he would take himself out of any investigation of Sinatra, should one develop. "If a friend or relative or business associate should be investigated by the department, I would disqualify myself from the investigation," Smith said.

Said that Justice will pursue the possibility of getting the FBI more involved in drug enforcement, and announced that he has discontinued the practice begun by Bell of publishing a log of his telephone calls."That was part of the Watergate overreaction," Smith said."We don't think it's an appropriate way of disseminating information."