The head of the U.S. Conference of Mayors called last night on those working to change government and corporate policy toward South Africa to take their movement to cities across the nation and to urge local governments to liquidate investments in banks and businesses that help South Africa.

New Orleans Mayor Ernest N. Morial addressed about 1,200 persons at the Washington Hilton Hotel at the eighth annual dinner of TransAfrica, the lobby that has organized and coordinated the daily demonstrations at the South African Embassy here.

In addition to the 2,200 people arrested here in protest of the system of racial segregation, hundreds have been arrested at South African offices elsewhere.

"How much more pressure could be exerted if efforts to influence South African economic and foreign policies were activated and fortified at the urban level in America -- where corporations are headquartered and where public contracts and funds can be administered to exclude interests aiding" the current South African government, Morial said.

He said it "is imperative, necessary and absolutely essential for this campaign to move out of Washington and into America's heartland."

Since demonstrations began at the embassy, he said, six states, 28 cities and 30 universities have passed resolutions calling for liquidation of public pension fund investments in companies doing business in South Africa.

In addition, Morial advocated a ban on public contracts with such firms, and withdrawal of public funds from banks selling South African krugerrands.

D.C. Mayor Marion Barry said he will propose renaming two blocks of Massachusetts Avenue NW near the embassy for Nelson Mandela, imprisoned leader of the banned African National Congress, and for his wife, Winnie.