DISEASE CHARACTERISTICS: Histologically confirmed myelodysplatic syndrome (MDS), diagnosed at least 3 months prior to study enrollment, with one of the following subtypes: Refractory anemia with excess blasts (RAEB) RAEB in transformation (RAEB-T) Chronic myelomonocytic leukemia (CMML) CMML with leukocytosis not controlled by hydroxyurea eligible in absence of neutropenia No treatment- or mutagen-related MDS One or more cytopenias required: Untransfused hemoglobin less than 10 g/dL and/or transfusion-dependent (requiring at least four units of red blood cells in prior 12 weeks) Platelet count no greater than 50,000/mm3 or absolute neutrophil count less than 1,000/mm3 No myelosclerosis occupying more than 30% of marrow