OBJECTIVES: I. Determine the rate and duration of complete and partial remissions in patients with previously untreated B-cell chronic lymphocytic leukemia after treatment with alternating courses of fludarabine and cyclophosphamide. II. Monitor and assess toxicity of this regimen in these patients. III. Utilize molecular genetic studies and flow cytometry on peripheral blood cells from patients achieving complete remission by conventional criteria. IV. Apply FISH techniques using probes to chromosomes 12 and 13 as prognostic factors for time to progression and overall survival of these patients.