OBJECTIVES: I. Determine whether intensive idarubicin and cytarabine leads to adequate harvest of Philadelphia chromosome-negative peripheral blood stem cells (PBSC) in patients with chronic myelogenous leukemia in chronic phase. II. Determine the toxicity of this intensive regimen in these patients. III. Determine the graft-versus-leukemia effect induced in these patients by cyclosporine and interferon gamma post-PBSC transplantation. IV. Determine the transformation-free and overall survival in patients treated with a high-dose conditioning regimen comprising busulfan and cyclophosphamide followed by PBSC transplantation plus immunotherapy.