Congressional foreign policy leaders demanded yesterday that President Reagan "apply the law" and impose further sanctions against South Africa as a means of ending apartheid.

In a report last week, Reagan said that a year of economic sanctions ordered by Congress in 1986 had not helped bring an end to the country's policy of strict racial segregation and said he favors a return to "a period of active and creative diplomacy."

Reagan's report was slammed by members of Congress at a Capitol Hill news conference yesterday as an attempt to reintroduce the administration's seven-year-old constructive engagement policy.

Rep. Howard Wolpe, (D-Mich.), chairman of the House Foreign Affairs African subcommittee, said "the law provides for President Reagan to abandon constructive engagement."

Wolpe criticized the present sanctions legislation as too mild, saying only one third of imports from South Africa and virtually no exports from America are affected.

Sen. Edward M. Kennedy (D-Mass.) said the sanctions legislation already enacted had restored the good standing of the United States in the rest of Africa.

"Increased repression inside South Africa over the past year is ample evidence that Congress did the right thing in distancing the United States from that regime . . . ," he said. "President Reagan should be making a greater effort to persuade our friends and allies to join us in new initiatives against apartheid."

Meanwhile yesterday, President Kenneth Kaunda of Zambia, chairman of the Organization of African Unity and leader of the Southern African Frontline States bordering South Africa, met with the president for talks that included "considerable" discussion about trying to bring apartheid to an end, a senior administration official said.

After the talks Kaunda said: "We have our differences in approach {to sanctions}, but not differences on principle."

The administration official said there had been no discussion of concrete changes on sanctions.

Senate and House subcommittees are to meet later this month to consider additional economic pressure on South Africa. Although the Senate subcommittee on African Affairs has no new legislation under consideration, the subcommittee's chairman, Sen. Paul Simon (D-Ill.), has said he favors increased economic pressure.

Wolpe said yesterday he backs renewal of the sweeping measures originally adopted by Congress last year. That legislation, which proposed disinvestment, was abandoned by the House in favor of a milder version passed by the Senate.

Among new legislation to be considered by the House subcommittee is a bill to impose a virtual oil boycott on South Africa.

Draft legislation authored by Rep. Robert E. Wise Jr. (D-W.Va.) would give the four American oil companies whose exports comprise 35 percent of South African crude oil purchases -- Exxon, Mobil, Texaco and Chevron -- 12 months to cease trade. If they did not do so, they would be ineligible to bid on oil, coal and gas leases in the United States for 18 months.

A House Ways and Means subcommittee will consider legislation to bar American businesses trading in South Africa from deducting the taxes they pay there, said Rep. Charles B. Rangel (D-N.Y.).