DISEASE CHARACTERISTICS:

• Diagnosis of 1 of the following:

  • Acute myeloid leukemia meeting 1 of the following criteria:

    • Previously untreated and not a candidate for anthracycline-based chemotherapy
    • In first or second relapse or refractory
    • Secondary to chemotherapy or an antecedent hematologic disorder and treated with no more than 1 prior intensive induction regimen
  • Chronic myelogenous leukemia in blast crisis at diagnosis or after prior imatinib mesylate

  • Myelodysplastic syndromes (MDS)

    • Refractory anemia with excess blasts (RAEB) or RAEB in transformation

    • Must meet at least 1 of the following criteria:

      • Absolute neutrophil count no greater than 500/mm^3
      • Platelet or red cell transfusion-dependent after no more than 1 prior intensive induction chemotherapy

  • Acute promyelocytic leukemia

    • t(15, 17)
    • Failed prior treatment with tretinoin and arsenic
  • Relapsed disease at least 3 months after prior autologous stem cell transplantation
• No active CNS leukemia

PATIENT CHARACTERISTICS:

Age

• 18 and over

Performance status

• ECOG 0-3

Life expectancy

• At least 8 weeks

Hematopoietic

• See Disease Characteristics

Hepatic

• Bilirubin no greater than 2.0 mg/dL
• AST and ALT less than 3 times upper limit of normal

Renal

• Creatinine clearance at least 50 mL/min

Cardiovascular

• Ejection fraction at least 40%
• No poorly controlled cardiac disease

Pulmonary

• No poorly controlled pulmonary disease

Other

• Not pregnant or nursing
• Negative pregnancy test
• Fertile female patients must use 1 highly effective and 1 additional method of contraception for 4 weeks before, during, and for at least 4 weeks after study
• Male patients must use effective contraception during and for 4 weeks after study
• Willing and able to comply with the System for Thalidomide Education and Prescribing Safety (STEPS) program
• HIV negative
• No poorly controlled infection
• No other active malignancy
• No severe peripheral neuropathy

PRIOR CONCURRENT THERAPY:

Biologic therapy

• See Disease Characteristics
• Prior thalidomide allowed for MDS
• At least 5 days since prior hematopoietic growth factors
• At least 2 weeks since prior biologic therapy
• No prior allogeneic bone marrow transplantation

Chemotherapy

• See Disease Characteristics
• At least 24 hours since prior hydroxyurea

Endocrine therapy

• At least 24 hours since prior corticosteroids

Radiotherapy

• Not specified

Surgery

• Not specified

Other

• At least 2 weeks since prior cytotoxic anticancer therapy
• Prior amifostine allowed for MDS