Some sixty years ago, Sigmund Freud wrote that psychoanalysis for phobic individuals would not work unless the individual confronted the feared situation or object.

Freud's successors essentially ignored that caveat only to have it embraced with passionate zeal by the more recent behavior-oriented psychotherapists. At about the same time the new psychotherapy was budding, the first behavior-modifying drugs were discovered and began to play an important role in treating mental illnesses.

Nowhere have these three major approaches to mental problems -- analytical, behavioral and pharmacological -- conflicted more dramatically than in the treatment of panic disorders. Behavioral and cognitive therapists say their approach works by simply explaining that the bouts of nameless dread and choking terror were never life threatening. Or they provide the emotional support to help an agoraphobic victim leave her house. Theoretically, as the victim sees that the unknown, but dreaded catastrophe, doesn't actually ever happen, he or (most often) she will gradually learn to overcome the phobia and minimize the panic attacks.

Although there were signal successes, there were failures and relapses as well. Therapists devised new ways to help victims confront fears -- from hypnosis and imaging to "flooding" with what one scientist called "Hitchcockian horrorifics," like teaching someone who fears rats to pet them.

At the same time, as the understanding of brain functions expanded, other researchers sought causes and cures in the brain itself.

The causes of the disorder are almost as controversial as its treatment. There is a strong, but by no means unanimous, leaning towards a genetic factor set off by some stressful life event. But behavior therapists are reluctant to concede a genetic cause because that suggests a biochemical solution -- which they reject.

Many therapists are ex-phobics, eager to share with others the techniques they have found helpful. But because one characteristic of this disorder is a hypersensitivity to -- or even a phobia about -- drugs, it is not surprising that the drug versus non-drug controversy in this setting is often shrill.

Some of the controversy about panic disorder -- as well as clues to its frequent misdiagnosis -- stems from the variety of symptoms often found along with the panic and the phobias. These can include migraine or cluster headaches, all sorts of allergies, and hypersensitivity to chemicals like caffeine.

Some phobics find even relatively mild exercise can provoke a panic attack. Researchers noted years ago that during exercise some of these individuals built up blood levels of lactate -- the chemical byproduct from a workout that leaves muscles aching -- at a faster rate than others. More recently, researchers have induced panic attacks in susceptible people by injecting sodium lactate.

Dr. James C. Ballenger, chairman of the Department of Psychiatry and Behavioral Sciences at the Medical University of South Carolina in Charleston, hypothesizes that a problem in the "fight or flight" alarm system in the midbrain causes panic disorders.

Certain drugs inhibit this alarm system's neurotransmitters and seem to block some panic attacks. But many of the drugs may have unpleasant -- and occasionally serious -- side effects, including one of the most effective, Phenelzine.

A new drug, related to Valium, called alprazolam (Xanax) has been used in clinical trials for about a year. In one as yet unpublished study of about 500 patients, Xanax worked "very well and very fast," says Ballenger, but long-term side effects and ease of withdrawal are not yet known.

The most effective drug, with the fewest side effects, Ballenger contends, is an anti-depressant called Chlorimipramine. Although it has been used in Europe and in Canada for nearly a decade, it was never approved for use in this country and, he says, it has been languishing in the Food and Drug Administration for months. Its patent has expired so "nobody would make any money on it," and apparently no company is pushing its approval.

Now, though, studies are beginning to suggest -- and an increasing number of scientists and therapists are beginning to concede -- that a combination of drugs and psychotherapy is better than either separately. In studies Ballenger participated in or reviewed, he found that best results came from drug therapy with some sort of accompanying psychotherapy -- or even simply a brochure explaining the disorder.

Yet problems remain. Principally, how to tell which patient will respond best to which treatment.

But even while the treatment controversy simmers, perhaps tens of thousands of sufferers still are unaware their symptoms are not uniquely, weirdly theirs. "It is still true," said one speaker at a recent phobia conference, "that a very large majority both of phobic people and their families as well as providers of medical services do not know that one need not suffer with this terrifying, overwhelming phenomenon. It has a name. It can be understood. And something can be done about it. . . . That is the measure of the unmet challenge."