The D.C. City Council, acting on an issue that sparked months of sharp debate on racial and ethnic discrimination, voted yesterday to expand the city's minority contracting program to include Asian Americans, Pacific Islanders and Hispanics of European descent.

At the same time, the council raised from 25 percent to 35 percent the minimum amount of city business that must be reserved for the program. That action was intended to accommodate new businesses that may apply for the program and to ease complaints earlier this year that expanded eligibility would hurt businesses owned by blacks.

In its first session since an August recess and last week's primary elections, the council by voice vote swiftly approved the changes without the heated debate that occurred in previous sessions and at a public hearing last May. Final action is scheduled at the council's next meeting Oct. 5.

At one point yesterday, council member Wilhelmina J. Rolark (D-Ward 8), the most vocal opponent of the changes, proposed to limit Hispanic participation to persons of South and Central American, Mexican and Caribbean descent, as the law currently provides.

Rolark said black businesses "continue to have the least access . . . to the sheltered market" which she said was "crucial to their survival." She contended that any expansion of the minority definitions would adversely affect blacks and undermine the original goal of the program to overcome economic and social effects of racial discrimination.

However, the council rejected the Rolark motion by a lopsided vote. Supporters of the measure approved yesterday have contended that the newly included groups are minorities under federal statutes and that blacks should not discriminate against other racial or ethnic minorities.

Hispanics of European descent were included in the original program passed in 1976, but were deleted, along with Asians, in 1980 after complaints that some wealthy European Hispanics were taking advantage of the law.

Although the current law requires that 25 percent of the city business be set aside, a spokesman for the city said yesterday the city expects to award to minority firms about $140 million of a total of about $375 million that will be spent on goods and services and construction for the current fiscal year. That amounts to about 37 percent.

Council member Charlene Drew Jarvis (D-Ward 4), who was an unsuccessful candidate for mayor in the Democratic primary, said she expects to receive later this week a list of firms that benefited from the program in 1981, when about $115, or about 34 percent of the city's 340 million, was spent with minority firms.

Some council members have been critical of the program for late payments to firms and have raised questions about the actual number of firms that have received contracts.

Voting against Rolark's amendment were Jarvis, Chairman Arrington Dixon, John A. Wilson (D-Ward 2), H.R. Crawford (D-Ward 7), Betty Ann Kane (D-At Large), Polly Shackleton (D-Ward 3), David A. Clarke (D-Ward 1) and Hilda Mason (Statehood At-Large).

John Ray (D-At Large) was attending a funeral in Georgia yesterday and William R. Spaulding (D-Ward 5) was vacationing in the Bahamas. Jerry A. Moore (R-At Large) was out of the room when the vote was taken, but said later he voted for the Rolark amendment, along with Nadine P. Winter (D-Ward 6).

In other business, the council approved a 7 percent pay raise for all of the city's nonunion employes. It also supported a move by Mason to hold up approval of fringe benefits of optical and dental care for about 450 nonunion employes of the school board, benefits that are included in most organized labor contracts with the city for the first time this year.

Mason said she did not oppose the benefits, which she said would cost about $96,000. Rather, she said, she was concerned whether enough money had been included in the 1983 budget for the expenses. The issue was sent back to the school board for further study.

The council also approved a 90-day delay in requiring gasoline service stations to install nozzles that will trap vapors from gasoline pumps rather than release them into the air, and it gave preliminary approval to a measure that would set up a five-member commission to oversee veterinary practices in Washington.