Residents of the Dupont Circle area lost what probably is a decisive round in a two-year fight yesterday when the D.C. City Council cleared the way for constructing a high-rise office building in the 1700 block on N Street NW, just east of Connecticut Avenue.

The winner of yesterday's preliminary 7-to-3 council vote was John O. Antonelli, stepson of millionaire parking and development magnate Dominic F. Antonelli, John Antonelli and his partners want to build a 90-foot building behind the facades of three 19th century townhouses at 1752, 1754, and 1756 N St. Final council action is expected March 18.

To make the project possible, despite neighborhood objections, the council must vote to close a 10-by-22-foot section of alley behind one of the town houses. The issue had been before the council's transportation committee since it held a hearing in February 1978.

Neighborhood residents and civic groups had asked the committee to refuse to close the alley until the D.C. Court of Appeals could rule in a lawsuit that challenges a zoning decision favoring the building. Despite the suit, if the alley is closed, Antonelli could begin construction.

Last November, heeding neighborhood opposition, the council committee voted 3 to 2 to block the alley closing. On Feb. 6, committee member Charlene Drew Jarvis (D-Ward 4) switched sides and the committee endorsed the closing.

John A. Wilson (D-Ward 2), who represents the neighborhood, argued against the council action yesterday, saying construction would destroy "the postcard quality" of the block and create needless traffic congestion.Opponents also contended the building would block a view of the dome of nearby St. Matthew's Cathedral.

The council vote was denounced by Ann Sellin, zoning chairman of the Dupon Circle Citizens Association and leader of a coalition of groups opposing the project. "When it comes to representing the citizens against a developer, the council is really representing the developer," she said. "The citizens are very bitter."