DISEASE CHARACTERISTICS: Cytogenetically proven Philadelphia chromosome positive chronic phase chronic myelogenous leukemia (CML) Initial diagnosis within the past 6 months No prior chemotherapy, including regimens used in peripheral blood progenitor cell (PBPC) mobilization for PBPC transplantation, for CML except hydroxyurea Must meet the following criteria: Blasts in peripheral blood and bone marrow less than 15% Blasts plus promyelocytes in peripheral blood and bone marrow less than 30% Basophils in peripheral blood less than 20% Platelet count at least 100,000/mm3 No extramedullary leukemic involvement except spleen or liver No patient for which a sibling bone marrow donor is available and allogeneic bone marrow transplantation is elected as first line therapy