The compiler munges continuation line when it sees quotes. The way round that is to use variables.
set dialogText to "directParamText"
set dialogDefAnswer to "defaultAnswerText"
set dialogButtons to {"one", "two", "three"}
set defButton to "one"
set cancelButton to "three"
set dialogTitle to "withTitleText"
set resultDialogReply to display dialog dialogText ¬
default answer dialogDefAnswer ¬
hidden answer false ¬
buttons dialogButtons ¬
default button defButton ¬
cancel button cancelButton ¬
with title dialogTitle ¬
with icon withIconValue ¬
giving up after givingUpAfterNumber