Imatinib Mesylate and Interferon Alfa in Treating Patients With Chronic Myelogenous Leukemia

DISEASE CHARACTERISTICS: * Cytogenetically confirmed chronic myelogenous leukemia (CML) * Less than 15% blasts in peripheral blood or bone marrow * Less than 30% blasts and promyelocytes in peripheral blood or bone marrow * Less than 20% basophils in blood or bone marrow * Platelet count at least 100,000/mm\^3 * No leukemia beyond bone marrow, blood, liver, or spleen * No chloroma * Phase I (closed to accrual as of 7/9/03): * Philadelphia (Ph) chromosome-positive CML in chronic phase * Phase II: * Newly diagnosed Ph chromosome-positive CML in chronic phase * Initial diagnosis within 6 months of study * No prior therapy for CML except hydroxyurea and/or anagrelide hydrochloride * Phase I (closed to accrual as of 7/9/03) and II: * No identified sibling donors where allogeneic stem cell transplantation is elected as first-line therapy PATIENT CHARACTERISTICS: Age: * 18 and over Performance status: * ECOG 0-2 Life expectancy: * Not specified Hematopoietic: * See Disease Characteristics Hepatic: * Bilirubin no greater than 1.5 times upper limit of normal (ULN) * AST or ALT no greater than 2 times ULN Renal: * Creatinine no greater than 1.5 times ULN Cardiovascular: * No New York Heart Association class III or IV heart disease Other: * Not pregnant or nursing * Negative pregnancy test * Fertile patients must use 2 methods of effective barrier contraception during and for at least 3 months after study participation * No other serious uncontrol…