 Patients receive azacitidine subcutaneously once daily on days 1-5 and arsenic trioxide IV over 1-2 hours on days 1, 2, 8, 9, 15, 16, 22, and 23. Treatment repeats every 28 days for 4 courses in the absence of disease progression or unacceptable toxicity. Patients are evaluated for response on day 113 week 17. Patients with disease progression or no response are removed from the study. Patients achieving a complete response CR receive 2 additional courses of therapy and then undergo observation. Patients achieving a partial response receive 2 additional courses of therapy and then receive arsenic trioxide alone twice weekly in the absence of CR, disease progression, or unacceptable toxicity. 