Vice President Bush and Geraldine A. Ferraro clashed here tonight in a debate in which Bush called President Reagan a force for peace and prosperity while Ferraro charged that his policies were dangerous and insensitive.

In only the second such vice-presidential face-off in U.S. history, the two sharply disputed issues ranging from arms control and the economy to abortion and civil rights. At the same time, both were forced to answer anew questions about their personal finances, a topic that has plagued both campaigns.

Both sides approached the encounter with the idea that it could have an important effect on the Democratic momentum that developed with Walter F. Mondale's performance against Reagan in the first presidential debate last Sunday.

The sharp differences articulated by the Italian immigrant's daughter and the son of a patrician New England senator were most evident in their statements closing their 90-minute match-up.

"It's the clearest choice in some 50 years," Bush said. "The choice is to move forward with strength and prosperity, or do we go back to weakness and despair?"

But Ferraro pleaded for a return to "the values of fairness and equal opportunity" and vowed in the debate's final line, "This campaign is not over. For our country, for our future, for the principles we believe in, Walter Mondale and I have just begun to fight."

The most combative exchange came in their discussion of foreign policy, when Ferraro turned to Bush at one point and rebuked him for misrepresenting her views and being "patronizing."

"Leave the interpretation to the American people watching this debate," she chided, after Bush suggested that she was opposed to all covert intelligence activities.

As they have throughout the campaign, the themes of religion and politics were mingled again tonight. Ferraro, a Roman Catholic who has tangled with members of the church hierarchy over her views on abortion, again pledged that she would resign from office if she were unable to reconcile her religion with her constitutional duties.

The panelists for the debate, which was sponsored by the League of Women Voters and held in the Civic Center, were Robert Boyd of Knight-Ridder, John Mashek of U.S. News & World Report, Norma Quarles of NBC News and Jack White of Time magazine. Sander Vanocur of ABC News was the moderator.

It was clear from the outset that both candidates arrived with agendas in mind, and neither appeared inclined to allow the questions to divert them. Bush used every opportunity to praise the Reagan administration's record and to chastise what he called "those liberals in that House."

For her part, Ferraro brushed past a question about Bush's extensive government service to expound on her favorite campaign message, that the Reagan administration is insensitive to those who have not shared in the economic recovery.

Even the styles of the two candidates were sharply different. Like the former prosecutor she is, Ferraro constantly scribbled notes and referred to them repeatedly, shaking her pen for emphasis.

Bush kept his eye on the camera and occasionally uncorked prepared one-liners, as when he said of Mondale, "If somebody sees a silver lining, he finds a big black cloud out there. Whine on harvest moon."

The vice president's strongest moments appeared to come when he capitalized on his diplomatic and intelligence experience in defending the administration's policies abroad. For example, he offered a detailed explanation of the distinction between the internal workings of the Marxist regime in Nicaragua and the newly elected moderate government in El Salvador after Ferraro denounced Reagan's covert war against the Sandinistas.

Ferraro, however, pointed out that she also has traveled to Central America and that Reagan's policies have not prevented a fourfold buildup in the Sandinista army.

"This administration has spent a trillion dollars on defense but it hasn't gotten a trillion dollars in national security," she added.

When asked about her relative inexperience after only six years in Congress, Ferraro noted that she also had worked as a teacher and prosecutor and quipped, "I wasn't born at the age of 43 when I entered Congress." She also said, "I level with people. I approach problems analytically."

The contrast between the two parties' views of the federal government's role emerged clearly as the two candidates debated domestic policy. Bush argued that economic recovery was the tonic to cure most social ills, while Ferraro slammed the administration for cutting school aid and disability aid while retreating from affirmative action.

"Is it a civil right to have inflation going off the chart so you're hurting every American family?" Bush asked. "I'm not suggesting there's not poverty," he continued. "The way to work out of poverty . . . is through real opportunity."

Ferraro questioned the breadth of the economic recovery, however, by drawing repeatedly on her campaign-trail encounters with the jobless or those threatened by toxic waste. She also charged Bush with distortions in contending that Reagan had brought a new prosperity to the country and said that 4 million more jobs were created during the Carter administration than in the last four years.

"People in Johnstown, Pennsylvania, are not terribly thrilled about what's happening in the economy," she said, citing a campaign stop in which she viewed a steel mill nearly idled by foreign competition.

As the debate opened, Bush was asked whether he would follow Reagan's policies if called upon to assume the presidency, given their past differences.

"I don't think there's a great deal of difference between my ideas and the president's," Bush replied.

He quickly shifted away from the question to praise Reagan about the economy: "This president turned it around, and I was with him every step of the way."

When pressed further on his differences, Bush declared, "I owe my president my judgment, and then I owe him my loyalty." He pointed out that Ferraro has disagreed with Walter F. Mondale on some issues.

Ferraro, asked to compare her six years in Congress with Bush's extensive experience as ambassador, congressman and CIA director, replied, "It is not only what's on your resume that makes you qualified." She noted that she also had worked as a teacher and assistant prosecutor in Queens.

Ferraro then turned the question into an attack on Reagan's policies, recalling that Bush had coined the phrase "voodoo economics" during the 1980 primary campaign to describe Reagan's policies.

"It was, and it is," Ferraro said.

Questioned about civil rights, Ferraro delivered a harsh attack on what she called the "failures of this administration" and "those very terribly unfair cuts for poor people in this country."

"There is a real difference between how the Mondale-Ferraro administration will address civil rights and the failures of this administration," she said, reciting the administration's support of tax breaks for segregated colleges and its opposition in the Grove City (Pa.) College case to equal funding for women's programs in colleges receiving federal funds.

Bush denied that the Reagan administration had cut funding for the poor, saying spending on food stamps and welfare had increased. He previously has acknowledged that these increases result largely from a rise in the number of people below the poverty line.

"We have some problems in attracting the black voter, and I think our record deserves better," Bush said. He cited support for black colleges, enterprise zones and a lowered minimum wage that he said would help black youth.

On the issue of separation of church and state, Bush and Ferraro agreed in principle but clashed on some particulars.

Bush repeated the administration's support for prayer in public schools, while Ferraro argued that our "country is founded on the principle that the government should be neutral" on religious issues.

When Ferraro charged that the Rev. Jerry Falwell, leader of the Moral Majority, has promised to pick the next two Supreme Court justices to fill any vacancies arising in a second Reagan administration, Bush called it a "canard" and "slander against the president." He noted that Reagan's only appointment to the high court has been that of Sandra Day O'Connor.

Bush and Ferraro defended their complex finances, which have been the subject of controversy. Ferraro drew laughter when she said she had hired a "marvelous accountant who will be doing my taxes for the next eight years" -- presumably for her two terms as vice president.

Ferraro said she had urged the House ethics committee to move swiftly to investigate her claim to an exemption from disclosing income from a firm in which she is a partner with her husband. She said that during the controversy over this claim, "I filed more financial information than any candidate in the history of this country."

Bush, whose payment of less than 13 percent of his income in federal taxes last year has stirred comment, also said he has made the greatest financial disclosure of any vice president.

Bush said Mondale made a "cheap shot" in criticizing his federal tax rate. He said he paid 42 percent of his gross income in state, local and federal taxes. He presumably was referring to the entire three-year period for which he recently released figures.

In the sharpest exchange between the two candidates, Ferraro turned to Bush and said in a frosty tone, "I almost resent, Vice President Bush, your patronizing attitude that you have to teach me about foreign policy."

Bush had suggested that Ferraro's opposition to covert CIA operations in Central America meant that she was inclined to abolish all such operations. He also implied that she did not understand the difference between terrorism in Beirut and the hostage crisis in Iran.

Following up her rebuke, Ferraro added, "Please don't categorize my answers either. Leave the interpretation to the American people watching this debate."

She said there is a "legitimate" role for covert operations by the U.S. government.

The two differed sharply on the use of military aid to advance U.S. diplomatic ends in Central America.

Bush forcefully defended the Grenada invasion and the "covert war" against the Sandinista government in Nicaragua. Citing his extensive dealings with officials in Central America, he suggested that Ferraro was naive to criticize the policies.

"There is a distinction between those countries that are searching for democracy and the handful of countries that have totally violated human rights and are going the Marxist-Leninist route," he said.

Ferraro said the Reagan administration "is Americanizing a regional conflict in Central America," adding, "Fritz Mondale and I feel you do deal first through negotiation, that force is not a first resort but certainly a last resort in any instance."

As they have on the campaign trail, Bush and Ferraro disagreed sharply on the issue of arms control. Ferraro charged Reagan with opposing every arms-control agreement "that every other president has negotiated."

Bush noted that the Soviet Union has had three heads of state during Reagan's term. Despite what he described as solid American proposals on intercontinental and intermediate-range nuclear missiles, "the Soviets have not been willing to talk," Bush said.

Ferraro said that being a woman would not interfere with her effectiveness as commander in chief.

"Are you saying that I would have had to have fought in a war in order to love peace?" she asked in response to a question. "It's about as valid to say that you have to be black in order to despise racism, that you have to be female in order to despise sexism."

She pledged to move to reduce the arms race, which she accused the Reagan administration of escalating, and said: "I think when we take a look at the failures of this administration, that would be No. 1.