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 uncontrolled medical condition * No autoimmune disease * No prior noncompliance to medical regimens or potential unreliability * No prior grade 3 or greater non-hematologic toxicity due to prior interferon (phase I \[closed to accrual as of 7/9/03\]) PRIOR CONCURRENT THERAPY: Biologic therapy: * See Disease Characteristics * No prior bone marrow or peripheral blood stem cell transplantation * At least 2 weeks since prior interferon alfa (phase I \[closed to accrual as of 7/9/03\]) Chemotherapy: * See Disease Characteristics * At least 6 weeks since prior busulfan (phase I \[closed to accrual as of 7/9/03\] ) * At least 2 weeks since prior cytarabine (phase I \[closed to accrual as of 7/9/03\]) * No concurrent chemotherapy * Concurrent hydroxyurea allowed during the first 3 months of study Endocrine therapy: * Not specified Radiotherapy: * Not specified Surgery: * Not specified Other: * At least 4 weeks since prior investigational agents other than imatinib mesylate (phase I \[closed to accrual as of 7/9/03\]) * No concurrent grapefruit juice * Concurrent anagrelide hydrochloride allowed during the first 3 months of study