RATIONALE: Drugs used in chemotherapy work in different ways to stop tumor cells from dividing so they stop growing or die. Radiation therapy uses high-energy x-rays to damage tumor cells. It is not yet known which chemotherapy regimen combined with radiation therapy and/or surgery is more effective in treating Ewing's sarcoma or primitive neuroectodermal tumor. PURPOSE: Randomized phase III trial to compare the effectiveness of different chemotherapy regimens combined with radiation therapy and/or surgery in treating patients who have Ewing's sarcoma or primitive neuroectodermal tumor.

OBJECTIVES: * Compare the effect of interval-compressed vs standard chemotherapy in terms of event-free survival and overall survival in patients with newly diagnosed, localized Ewing's sarcoma or peripheral primitive neuroectodermal tumor. OUTLINE: This is a randomized, multicenter study. Patients are stratified according to age (under 18 years vs 18 years and over) and location of primary disease (pelvic vs nonpelvic). Patients are randomized to 1 of 2 treatment arms for induction and continuation therapy. * Induction therapy (weeks 1-12): * Arm I: Patients receive alternating courses of chemotherapy consisting of vincristine IV on day 1, doxorubicin IV continuously over 48 hours on days 1 and 2, and cyclophosphamide IV over 1 hour on day 1 for courses 1 and 3 and ifosfamide IV over 1 hour and etoposide IV over 1-2 hours on days 1-5 for courses 2 and 4. Beginning 24 hours after the last dose of chemotherapy for each course, patients receive filgrastim (G-CSF) subcutaneously (SC) daily until blood counts recover. Treatment continues every 3 weeks for 4 courses. * Arm II: Patients receive alternating courses of chemotherapy consisting of vincristine, doxorubicin, and cyclophosphamide as in arm I for courses 1, 3, and 5 and ifosfamide and etoposide as in arm I for courses 2, 4, and 6. Patients also receive G-CSF as in arm I. Treatment continues every 2 weeks for 6 courses. After completion of induction therapy, patients in both arms receive local control treatment to the primary tumor. Patients receive continuation chemotherapy after surgery or concurrently with radiotherapy. * Continuation therapy: * Arm I (weeks 13-42): Patients receive additional alternating courses of chemotherapy as in arm I of induction therapy with the exception of vincristine and cyclophosphamide alone for courses 7 and/or 11 and/or 13. Patients also receive G-CSF as in induction therapy. Treatment continues every 3 weeks for 10 courses. * Arm II (weeks 13-29): Patients receive additional alternating courses of chemotherapy as in arm II of induction therapy with the exception of vincristine and cyclophosphamide alone for courses 9 and/or 11 and/or 13. Patients also receive G-CSF as in induction therapy. Treatment continues every 2 weeks for 8 courses. Patients are followed every 3 months for 4 years and then every 6 months for 1 year. PROJECTED ACCRUAL: Approximately 528 patients will be accrued for this study within 4-5 years.