Capecitabine and Radiation Therapy With or Without Panitumumab in Treating Patients With Advanced Rectal Cancer

DISEASE CHARACTERISTICS: * Histologically confirmed advanced adenocarcinoma of the rectum with or without nodal involvement * Stage mrT3-4 and/or mrN1-2, M0 * Tumors must express wild type K-ras gene * No distant metastasis PATIENT CHARACTERISTICS: * WHO performance status 0-1 * Able to undergo surgery * ANC ≥ 1,500/mm\^3 * Platelet count ≥ 100,000/mm\^3 * Hemoglobin ≥ 100 g/L * Creatinine clearance ≥ 50 mL/min * AST ≤ 2.5 times upper limit normal (ULN) * Total bilirubin ≤ 1.5 times ULN * Not pregnant or nursing * Negative pregnancy test * Fertile patients must agree to use effective contraception during and for 12 months after completion of study * No malignancy within the past 5 years with the exception of adequately treated cervical carcinoma in situ or localized nonmelanoma skin cancer * No psychiatric disorder that would preclude understanding study-related information, giving informed consent, or complying with oral drug intake * No prior existing conditions that would preclude radiotherapy * No clinically significant (i.e., active) cardiac disease (e.g., congestive heart failure, symptomatic coronary artery disease, and cardiac arrhythmia even if controlled with medication) or myocardial infarction within the past 12 months * No lack of physical integrity of the upper gastrointestinal tract or malabsorption syndrome * No serious underlying medical condition that, in the judgement of the investigator, could impair the ability of the patient to participate in the trial (e.g., active autoimmune disease or uncontrolled diabetes) * No known dihydropyrimidine dehydrogenase deficiency * No known hypersensitivity to trial drugs or hypersensitivity to any other component of the trial drugs PRIOR CONCURRENT THERAPY: * More than 30 days since prior treatment in a clinical trial * No other concurrent experimental drugs, anticancer therapy, or investigational treatments * No prior treatment for rectal cancer * No prior anti-EGFR antibody therapy (e.g., cetuximab) or small-molecule EGFR inhibitors (e.g., erlotinib hydrochloride) * No concurrent treatment with brivudine, lamivudine, ribavirin, or any other nucleoside analogues * No organ allografts * No concurrent drugs contraindicated for use with the trial drugs * No other concurrent anti-EGFR-targeting agents * No other concurrent radiotherapy