NEW YORK -- Confronting the dead has always been one of medical school's most gruesome initiations. This year, however, a special scare swept through students at New York University medical school when they faced their first cadavers.

There was none of the customary nervous laughter or morbid jokes. Instead, silent panic seized the hall as members of the next generation of America's doctors were struck by a single, horrifying thought.

"We all just wondered if these people had died of AIDS," said Jennifer Adelson, 22. "Everyone froze and the teachers knew why. The first thing they told us was that none of them had been infected. After that, things loosened up."

It was a scene that even four years ago would not have taken place. But for medical students today, particularly in New York, AIDS has become the overriding fact of life. Even at NYU, where students training at Bellevue Hospital Center regularly treat people with AIDS, officials worry that the prevalence of the disease will discourage future students from entering medicine.

Their concerns are not without reason. Over the past few years, a growing percentage of the nation's brightest medical school graduates has been shopping for specialties requiring little real contact with patients.

This year, so many of the nation's 16,000 medical school graduates entered fields other than internal medicine that the annual selection ritual became known as "Black Tuesday." Unnerved by rocketing malpractice premiums, staggering training schedules and, above all, a disease that does nothing but kill, many young doctors are simply looking for a way to avoid treating sick people.

As a result, some of the best training programs in the country failed to fill all their positions this year. Although AIDS is only one part of the problem, officials in New York and San Francisco, the cities hit hardest by the epidemic, worry that as the death toll rises they will be unable to attract the talented doctors they have relied on in the past.

"Many programs just can't get the quality doctors they have always sought," said Dr. Robert Cohen, vice president for medicine at New York's Health and Hospitals Corp., which trains hundreds of the nation's new doctors each year in internship and residency programs. "And AIDS is clearly one of the reasons. The fear is shared by everyone. AIDS poses an immense challenge to this profession. New doctors must be prepared for struggles we did not foresee a decade ago."

Officially, the American medical establishment has been reluctant to pin the falling interest in internal medicine on AIDS. Clearly, many young doctors have been attracted to specialties with better hours and more pay. But last fall, when a special issue of the Journal of the American Medical Association failed to mention AIDS as one reason for the waning interest in medicine, many health professionals were stunned.

"They just refuse to take a leadership position and acknowledge that there is a problem," said Rodger McFarlane, who runs a city-sponsored program to train New York health professionals how to respond to AIDS. "The medical establishment is a stuffy, antediluvian old boys' club."

Although AIDS permits a remarkable array of infections to attack the body, many medical officials say an education preoccupied with the disease would not properly prepare doctors for modern medical practice. Others call the argument specious.

"It's just ludicrous," said Dr. Michael Gottlieb, a former professor at the UCLA School of Medicine who was one of the first American doctors to diagnose the disease in 1981. "If you treat AIDS, you treat it all."

But even in cities where the disease is relatively rare, AIDS has cast a shadow so dark that many educators believe the force of the epidemic will bring new directions for medical training. Some experts have called for the creation of separate hospitals to treat those infected with the AIDS virus, but others say that training only with AIDS patients would create a two-class system of health care in the United States.

As officials puzzle out the challenges, medical schools and teaching hospitals across the country are grappling with how best to prepare their students for the growing caseload of a disease with no cure.

Fear of AIDS poses a greater threat to medical students than the disease itself. Even at NYU, whose students make it a point of honor to work on the front-lines of medicine, the fears are never far from the front of their minds.

"The first time I got blood on my hands I just choked up," said Walter Mashman, a fourth-year student who intends to practice internal medicine. "I searched my body for cuts, I looked at the pores of my skin. It is very upsetting because AIDS means death.

"But after a while," he continued, "I talked myself out of the worst stage. I just realized that fears are exaggerated and you cannot let them eat you up. We are supposed to be compassionate, that's why we are here. But believe me, it's easier to say than to be."

For many doctors treating their first AIDS patients, confronting the disease can be immobilizing. The weapons are primitive and, in the end, the results are always bad. Futility can quickly overcome even the most confident among them, and these days futility is easy to find.

"I've seen the students' faces when I tell them how much AIDS we see here," said Dr. Jonathan Samuels, an infectious disease specialist at North Central Bronx Hospital. "And it turns them away. People will tell you it's the quality of life in New York, or the long hours, or the facilities, but that's not it at all. It's just AIDS.

"These people are every type of walking tragedy, but they deserve our help," he continued. "The doctors who can't accept that should look for another profession."

Despite their fears, most young doctors have shown no serious inclination to walk away from patients with AIDS. But coming to terms with the disease as it becomes a dominant factor in American medicine will require major changes in the way students are trained.

"People in this profession are asking themselves the most basic, frightening questions," said Dr. R. Nathan Link, an NYU resident who conducted a recent survey finding that many young doctors do not want to treat people with AIDS. "For some doctors, fighting the fear and the anxiety is a full-time job."

Some medical experts say that treating AIDS will require a new approach to medicine, one more akin to social work and one that many doctors shun. And most officials agree that such changes have not yet been reflected at America's 127 medical schools. Administrators all say that training doctors in the age of AIDS will be a special challenge. But no one seems to know where this challenge will lead.

"I don't think the medical faculties have really sat down and thought fully enough about how this epidemic will change medicine," said Dr. Paul Volberding, chief of AIDS activities at San Francisco General Hospital. "High-tech medicine won't be the answer. We need people who care for patients. Not just doctors, either, but nurses and social workers, too. And they will have to work as a team."

That kind of coordination does not come easily to a profession as hierarchical as medicine. And the trend toward specialization threatens to turn new doctors into what one professor called "technological mules, pack horses with meters and electrodes."

San Francisco may provide the best example of coordination among health professionals. With 700,000 residents and the country's highest per capita incidence of AIDS, the city has established an aggressive network of social service agencies to help care for the sick.

Medical school has always been a four-year test of endurance, and students have generally been treated like workhorses. But these are particularly tough times for medical students.

Applications are at the lowest point in years, with many college students thinking twice about the huge commitment of time and money that medicine requires. In 1974 there were more than three applications for every space in an American medical school. Now the ratio is less than 2 to 1.

"The pre-med class at Penn was enormous until our junior year," said Neil Katz, 21, a first-year student at NYU. "Now most of those people are at Kidder, Peabody or Salomon Brothers. This is not weeding out the weak ones, either. Those were the brightest kids in my class."

Some officials blame the high cost of education and the grueling servitude necessary to train in most hospitals. Others say patient care in the age of medical machinery has lost its luster. To support these views they point to a surge of interest in technical specialties, such as radiology, ophthalmology and orthopedics. Officially, at least, no one mentions AIDS.

"We are very concerned about the falling numbers of applications," said Dr. Carlos Martini, vice president for medical education at the American Medical Association. "Clearly there is a view that medicine is less attractive as a profession than it once was. But I don't think you could point to one specific reason. We just have to go out there and sell this profession."

But in private discussions, different concerns are raised. One recent New York survey suggested that at least a quarter of new doctors would prefer not to treat AIDS patients. Five years ago, medical students flocked to examine patients with AIDS, viewing them as a medical opportunity. Today, it is a chance many would rather pass up. Students are obsessed by AIDS even when they know the risks to them are minute.

"I think about AIDS all day and all night long," said a fourth-year student at UCLA medical school who asked not to be identified. "When I draw blood I worry. When I go home at night I wonder if I did something wrong. When doctors are together, AIDS is what they discuss."

So far only a handful of hospitals have felt the full impact of the disease, but epidemiologists predict that within five years many more will be overwhelmed with patients. Almost 30,000 Americans have died of acquired immune deficiency syndrome, and more than 50,000 have contracted the disease. But the Public Health Services estimates that up to 1.5 million Americans have been infected with the HIV virus that causes AIDS, and by 1991 they predict that at least 270,000 Americans will have become ill. Other forecasts are more pessimistic.

For medical students trained to believe in their healing powers, the specter of an incurable illness that afflicts young people can be overpowering. Increasingly, people with AIDS are intravenous drug users who are generally poorer and more hostile than the gay men who have dominated patient groups. Like most people who become sick with AIDS, they often need a great deal of care and they are almost never easy to treat.

"When I was applying to medical school, herpes was on the cover of Time," said Asa Nixon, a fourth-year student at NYU. "That was going to be the disease of the '80s. AIDS didn't really register. None of us had any idea what we were getting into."

Perhaps no hospital has been affected by the AIDS epidemic more dramatically than Bellevue, the country's oldest public hospital, which has by far the greatest number of AIDS patients in the city.

Bellevue has always had its doors open to the most desperate and the poorest of the sick. A wooden, horse-drawn ambulance from 1898 stands on display in the medical center as a reminder of the days before computer imaging and fetal heart monitors.

Today it is a strange mix of stunning technical achievements and battalions of weary, overworked doctors catering to a largely poor, desperate clientele that increasingly has nowhere else to turn for help of any kind.

On an average day, the hospital can have more than 100 AIDS patients, more than any other hospital in the country and four times the daily average only three years ago. New York's Health and Hospitals Corp. has 11 hospitals with a combined caseload of at least 400 AIDS patients each day.

Residents and medical students at Bellevue have been conditioned by their experience, and the hospital's unforgiving pace allows no time for second thoughts. But occasionally, fear gains the upper hand.

Last May, the federal government stunned hospital workers by reporting that three women working in hospitals had become infected by the AIDS virus after each was splashed with blood on open wounds.

"Everyone was in shock here," said Laura Bessen, a fourth-year student. "I'll never forget that first morning after we heard about it, we came in and people said things like, 'Maybe I'll go to law school,' 'Maybe I'll drop out of medicine; this is not the place for me, it's just too dangerous.' It took us all a few days to cool down."

Both the AMA and the Association of American Medical Colleges have assigned task forces to study the impact of AIDS on medical education. Curriculum changes and additions are discussed, but many teachers feel that classroom changes would not help much.

The approach to training doctors varies among schools, but most have only slightly altered their course schedules.

"The principles of managing infectious diseases have not changed," said Dr. Richard Behrman, dean of Case Western School of Medicine in Cleveland. "The epidemic has dramatic implications in terms of the public. But should we change the way we educate our students? I don't think so.

"There's no question that some very popular programs like San Francisco General's had big problems getting the kind of people they usually get. But what we need to do is make sure that students know how small their risks are. And we need to remind students that good doctors are healers."

Many leading health professionals say that medicine would be better off without anyone who could be scared away by AIDS.

"Nobody needs that kind of doctor," said McFarlane, who runs a New York City-sponsored program to train medical professionals how to respond to the epidemic. "The profession is better off without the people who hate their patients.

"I have plenty of compassion for the folks with real concerns," he said. "But we can use the medical schools and hospitals to teach them how to deal with those problems. There are thousands of people out there asking themselves the same questions: 'Do I have the knowledge, expertise and psychic resources to really walk out into the field of medicine at this point and see so many young people die?' At this point you would have to assume it's still an open question."