Arm II: Patients receive treatment as in arm I with the addition of PSC 833 induction. A loading dose of PSC 833 IV is given over 2 hours, followed by a 74-hour continuous infusion of PSC 833 beginning 2 hours before daunorubicin and etoposide. Patients may receive a second induction course if residual leukemia is present in the bone marrow. Patients who experience a complete remission (CR) and meet certain other criteria receive postremission chemotherapy consisting of cytarabine IV continuously over 5 days plus daunorubicin IV followed by etoposide IV over 2 hours on days 1 and 2. Patients who are randomized to receive PSC 833 during induction chemotherapy receive a loading dose of PSC 833 before beginning a 48-hour continuous infusion of PSC 833 concurrently with cytarabine/daunorubicin/etoposide postremission chemotherapy.