Differences between officials from Montgomery County and elsewhere over how to handle the area's drought flared again yesterday at the first meeting of a regional water supply panel intended to make peace over the issue.

The group of officials, convened by the Metropolitan Washington Council of Governments, is supposed to submit a report by mid-November that reviews existing water supplies, regional agreements for dealing with drought and future needs.

The meeting came only a day after Maryland Gov. Parris N. Glendening (D) lifted the mandatory water restrictions he imposed Aug. 4, saying conditions had improved. The Washington Suburban Sanitary Commission said water use did not rise yesterday in suburban Maryland, partly because temperatures remained relatively cool and rain is expected this weekend.

Meanwhile, the U.S. Geological Survey warned yesterday that the drought, which began in July of last year, is not over yet and that the temporary help from last week's rains already has faded.

A ground-water monitoring well near the District set a new monthly low in August for the third month in a row, the Geological Survey said. The average daily flow in the Potomac River last month was the third lowest on record, after the droughts of 1930 and 1966.

The drought has devastated many local farmers and dried up wells that many households use for drinking water. But the three major water utilities serving most of the Washington area say their supplies have never been in jeopardy, even though the drought forced them to use water stored in reservoirs for the first time since the reservoirs were built in the 1980s.

The drought set off a war of words across the Potomac River, with Montgomery County Executive Douglas M. Duncan (D) endorsing strong conservation measures and Northern Virginia officials accusing him of overkill.

Yesterday's rhetoric was more muted. But there were plenty of differences--enough for several panel members to warn their colleagues against delivering an inconsistent message to the public.

"It's obvious we have a communications problem," said Gloria Fisher, chairman of the Interstate Commission on the Potomac River Basin, which coordinates water supply issues. She added later, "Hopefully, if this happens again, we'll have a different process by which this is handled."

Fairfax County Supervisor Robert B. Dix Jr. (R-Hunter Mill) seized on the commission's reassurance of adequate water supplies to criticize some people--unnamed--for "raising public anxiety" earlier this summer.

The adequacy of water supplies, he said, "is a significant fact that has been clouded by some of the discussions that have taken place."

But one of Duncan's representatives on the task force, Montgomery environment director James Caldwell, said the COG task force has a responsibility to address issues broader than drinking water supplies from the Potomac. The capacity of local wells and the effects of drought on the environment are also important issues that should be on the table, he said.

"It's a bigger picture than telling people because we have reservoirs, everything is all right," he said. Caldwell also echoed Duncan's call for water issues to be coordinated by a new regional commission with representatives from local governments as well as the utilities. Commissions already exist to coordinate transportation, air quality and Chesapeake Bay issues.

Duncan is scheduled to speak to the Council of Governments board next week on the need for a new regional water commission.

Others, though, warned that if proposals by Duncan or others would result in significant change to the agreements written two decades ago to allocate water from the Potomac River, they would resist because those pacts have served the region well.

"If there is any effort to change the current agreement, it's going to give me heartburn," Ron Linton, chairman of the D.C. Water and Sewer Authority, said in an interview after the meeting. "If they change them so somebody gets more, somebody is going to get less."

Fairfax County officials insisted yesterday that the COG panel take up the contentious issue of whether the county should be allowed to build a new water intake pipe in the Potomac. The proposal has stiff opposition from Maryland.

The task force tentatively scheduled a five-hour workshop Sept. 29 to look at a variety of issues in depth.

Almost lost in yesterday's debate was the panel's mission to study long-term water supply issues. The region's three biggest water suppliers--the Army Corps of Engineers, the Fairfax County Water Authority and the Washington Suburban Sanitary Commission--are due to report next spring on whether existing supplies are adequate to meet long-term needs. The COG panel hopes to have a voice in that study.

Staff writer Scott Wilson contributed to this report.