Growing concern over the impact of the Iran-contra affair on the Reagan administration has sliced Vice President Bush's lead over Sen. Robert J. Dole (R-Kan.) to 7 points in a trial run for the 1988 Republican presidential nomination, the latest Washington Post-ABC News poll shows.

The survey, completed Monday, showed Jesse L. Jackson leading the Democratic field, with Massachusetts Gov. Michael S. Dukakis, Sen. Paul Simon (Ill.) and Rep. Richard A. Gephardt (Mo.) bunched closely behind him.

The poll also showed a dramatic upsurge in support for a tougher trade policy but indicated that trade has not yet become a cutting issue among the candidates.

Thanks to a large advantage in the South, Bush had a 35 to 28 percent lead over Dole among 493 registered voters who identified themselves as Republican or Republican-leaning. His margin in a similar group in a March poll had been 12 points, 42 to 30 percent.

Rep. Jack Kemp (N.Y.) was in third place with 11 percent. Evangelist-broadcaster Marion G. (Pat) Robertson had 7 percent and former secretary of state Alexander M. Haig Jr. had 5 percent, with 3 percent for former Delaware governor Pierre S. (Pete) du Pont IV and former senator Paul Laxalt (Nev.).

Bush is far out front in the Republican field in terms of finances and endorsements, but the poll demonstrated in several ways that the Iran-contra affair is damaging his standing -- even though investigators have found no evidence of wrongdoing on his part.

The percentage of Republicans who say Bush has been telling the truth about the Iran affair has declined from 61 percent in January to 49 percent. At the same time, concern has grown that the Iran-contra affair, the subject of televised congressional hearings, may have long-term consequences. Among the Republicans surveyed, 46 percent said they think President Reagan will be able to put the Iran arms situation behind him and 52 percent said they think he will continue to have problems because of that issue.

The survey indicates that the longer the issue lingers, the greater the damage to Bush may be. In the group saying the issue can be overcome, Bush holds a 40 to 24 percent lead over Dole. But in the second group, they are tied at 31 percent.

"That's a pretty powerful contrast," said Douglas L. Bailey, a Republican campaign consultant with no ties to any of the presidential candidates. "The people who think the administration can't put Irangate behind it are saying we need a change. The vice president may suffer for the same reasons the president has suffered."

On the Democratic side, the poll confirmed the widespread evidence that support has scattered since the withdrawal of the early front-runner, former senator Gary Hart (Colo.). Jackson, the civil rights activist-minister, had 22 percent of the 565 self-identified Democrats and leaning-Democratic registered voters, up from 13 percent in the March poll, which Hart led.

Jackson is backed by seven of 10 black Democrats and one of 10 whites. Robert G. Beckel, a political consultant who managed Walter F. Mondale's 1984 campaign, said he was impressed by Jackson's white support -- far higher than Beckel said he drew in similar 1984 polls by the Mondale campaign. Exit polls in 1984 showed California the only state where Jackson broke into double digits among whites.

But 42 percent of the Democrats say Jackson is not qualified to be president -- much higher than for any other Democrat. In the GOP field, Robertson faces even more skepticism, with 49 percent of the Republicans saying he is not qualified.

Two recently announced candidates -- Simon and Dukakis -- made impressive debuts, each drawing 13 percent of the national Democratic vote. Both showed clear regional patterns of support -- Dukakis leading the Democratic field in the Northeast and Simon enjoying a similar standing in the Midwest.

The only other Democrat to break into double figures was Gephardt, whose support was 11 percent nationally and second to Simon in the Midwest. Newly announced Sen. Albert Gore Jr. (Tenn.) has 6 percent nationally, but is runner-up to Jackson in the South. Former Arizona governor Bruce Babbitt has 5 percent and Sen. Joseph R. Biden Jr. (Del.) has 3 percent.

Early polls often reflect simple name familiarity and Beckel said that the Democratic figures show "this is still anyone's ball game."

A heavy shift to "protectionist" sentiment on trade issues was discerned in voters of both parties. Overall, those polled said by 64 to 33 percent that the government should try to preserve American jobs by imposing taxes and limits on foreign imports even if that means higher prices for U.S. consumers. A similar question in September 1985 split the sample 49 to 43 percent.

The biggest gains for a tough policy were registered among women, younger and middle-aged voters, middle- and upper-income voters and westerners. Republicans have joined Democrats in favoring import limits.

But in neither party did the candidate standings appear to be affected by trade policy stands, suggesting that their varying views are not yet well known to the voters.Staff polling analyst Kenneth E. John contributed to this report.