Next door to Benny's Home of the Porno Stars on 14th Street NW, the Californian Steak House was offering its standard fare yesterday: naked women gyrating to the sounds of disco music and the pulse of flashing green lights.

But the steak house--in a legal challenge that could have broad implications for District neighborhoods--could soon be forced out of business for operating a "sexually oriented establishment" in violation of a 1977 zoning law.

One of Washington's most prominent real estate developers, Jeffrey N. Cohen, who owns the building, has been trying for several years to close the Californian as part of his effort to develop a multimillion-dollar office complex or hotel on the site at 14th and I streets NW, which is only several blocks from Metro Center and the White House.

Cohen's lawyer, Norman M. Glasgow Jr., initiated the current case last year by filing a protest with the D.C. zoning administrator. He charged that the steak house was violating the law by offering sexually oriented entertainment when its certificate of occupancy only provided for the operation of a restaurant.

The restaurant's certificate of occupancy was revoked March 24 and the steak house is appealing the decision, asserting that naked women dancing does not necessarily make the restaurant a sexually oriented business.

Community groups in Shaw, Logan Circle, Tenley Circle and elsewhere are now supporting Cohen in the legal battle because of their fears that if the nightclub is successful in challenging D.C. zoning law, then sexually provocative businesses will have easier access to their areas.

"The importance of the law for Dupont Circle, Logan Circle and other neighborhoods is that they saw this law as a tool to prevent their neighborhoods from becoming the next 'red light district,' " said a lawyer familiar with the case. "If that law is found to be deficient, it could make neighborhoods from Capitol Hill to Georgetown vulnerable to being inundated."

"It could be a very important case," said Stephen Sher, executive director of the D.C. zoning office. "There are a lot of ways this can be resolved and some of those ways could set a precedent."

The restaurant's lawyer, Larry C. Williams Sr., said in an interview that the Californian's shows featuring naked women do not violate the law because the regulations only prohibit shows that feature sexual activity and exposed parts of the anatomy. "The key word is 'and'," Williams said.

"Nudity is not enough" to declare a show illegal, he said. "You have to have masturbation, fornication or bestiality . . . . But, if all the girls are doing is dancing, and not touching anybody, then it is not prohibited."

If Williams' view is upheld by the zoning board, the ruling would have "tremendous implications citywide," said Glasgow. "These types of operations with exotic dancing . . . will not be deemed sexually oriented, and they can establish themselves in any commercial zone."

The 1977 regulations adopted by the D.C. Zoning Commission declared that sexually oriented businesses, especially when they are clustered together, have "serious negative impact" on neighborhoods, reduce property values, discourage new investment, and give Washington a negative image--especially for tourism.

The regulations prohibit any such business within 600 feet of a church or school, or within 300 feet of any other sexually oriented establishment. In addition, they can only be located in high-density zones such as downtown Washington. These businesses can receive certificates of occupancy only through a special exception from the zoning board. City officials said yesterday that no such exceptions have been granted since the law took effect.

The bars, movie houses and massage parlors on the 14th Street Strip were exempted from the new law because of their "grandfather rights" as preexisting sexually oriented businesses, according to city officials.

However, the steak house, at 831 14th St., does not enjoy that protection because it only began its nude dancing in 1980. Former owner Quy Huy Nguyen said in an interview last year that he discovered he could earn considerably more money with dancing girls than with steaks.

Cohen--who also owns the neighboring buildings housing the sexually oriented Benny's, and the Butterfly and Cocoon clubs--said in an interview that he has spent about $6 million acquiring properties (but not the businesses) in the 14th Street Strip.

Cohen tried three years ago to buy out the lease of the previous owners of the steak house, but those negotiations failed. He then filed suit in 1981, seeking to evict the operators because their sexual fare violated their lease, which runs until 1988. Since that time the business has changed hands and its current owners are Abdolali Mehraz and Kourosh Movahedi.

Williams said Cohen's current challenge is economically motivated. "They want the guys out, but don't want to have to buy out" the lease, he said.

Cohen disputed Williams' characterization, saying, "When there is an opportunity to enforce the law and benefit the community, it ought to be done . . . . Two blocks from the White House, it is a bad image for the city."

Neighborhood groups, and the Committee of 100 Ministers have filed letters with the zoning board supporting Cohen's position, calling for the board to uphold the revocation. "Our basic concern is people who refuse to pay attention to the law," said Thomas Lodge, spokesman for the Logan Circle Community Association. He said neighbors fear that businesses like the steak house will move to Logan Circle. "It is out of our neighborhood," he said, " But what gets decided in downtown cases can have an effect on residential neighborhoods."