RATIONALE: Drugs used in chemotherapy use different ways to stop cancer cells from dividing so they stop growing or die. PSC 833 may help chemotherapy drugs kill more cancer cells by making them more sensitive to the drugs.

PURPOSE: Phase II trial to study the effectiveness of PSC 833, daunorubicin, and cytarabine in treating older patients who have newly diagnosed acute myeloid leukemia.

OBJECTIVES: I. Determine the safety and efficacy of daunorubicin and cytarabine by continuous infusion and PSC 833 in patients over age 56 with newly diagnosed acute myeloid leukemia. II. Determine the frequency and severity of toxicities of this regimen in these patients. III. Determine the frequency and prognosis of functional and phenotypic P-glycoprotein expression, cytogenetics, and pharmacokinetics in this population.

OUTLINE: This is a multicenter study. Patients receive induction chemotherapy consisting of PSC 833 IV over 2 hours on day 1, then continuously for 96 hours; daunorubicin IV continuously on days 1-3; and cytarabine IV continuously on days 1-7. Filgrastim (G-CSF) or sargramostim (GM-CSF) is administered subcutaneously (SQ) or IV beginning on day 15 and continuing until blood counts recover or day 21. If patients do not achieve complete remission after one course, a second course is administered. Patients who achieve A1 bone marrow, B1 peripheral blood, and C1 extramedullary disease status after 1 or 2 courses of induction chemotherapy proceed to consolidation therapy, which begins upon recovery from induction therapy. Consolidation therapy consists of PSC 833 over 2 hours on day 1, daunorubicin IV over 1-5 minutes on days 1 and 2, and cytarabine IV continuously on days 1-5. Treatment repeats for a total of 2 courses. Patients are followed every 6 months for 2 years and then annually for 3 years.

PROJECTED ACCRUAL: A total of 20-55 patients will be accrued for this study within 8-9 months.

DISEASE CHARACTERISTICS: Morphologically confirmed acute myeloid leukemia (AML) No M3 AML or blastic phase chronic myelogenous leukemia Must be registered on protocols SWOG-9007 and SWOG-9910

PATIENT CHARACTERISTICS: Age: 56 and over Performance status: Zubrod 0-3 Life expectancy: Not specified Hematopoietic: Not specified Hepatic: Bilirubin no greater than 2 times upper limit of normal (ULN) SGOT/SGPT no greater than 4 times ULN Renal: Creatinine no greater than 1.5 times ULN Creatinine clearance greater than 40 mL/min Cardiovascular: LVEF at least 50% by MUGA or echocardiogram No unstable cardiac arrhythmias or angina Other: Not pregnant or nursing Fertile patients must use effective contraception No other malignancy within the past 5 years except: Adequately treated basal cell or squamous cell skin cancer Carcinoma in situ of the cervix Adequately treated stage I or II cancer in complete remission

PRIOR CONCURRENT THERAPY: Biologic therapy: Not specified Chemotherapy: No prior chemotherapy for acute leukemia Prior hydroxyurea to control high cell counts allowed At least 30 days since prior low dose cytarabine (less than 100 mg/m2/day) for myelodysplastic syndrome and recovered Single dose of prior or concurrent (with induction chemotherapy) intrathecal chemotherapy allowed Endocrine therapy: Not specified Radiotherapy: Not specified Surgery: Not specified