RATIONALE: Drugs used in chemotherapy use different ways to stop tumor cells from dividing so they stop growing or die. Combining more than one drug may kill more tumor cells.

PURPOSE: Randomized phase II trial to compare the effectiveness of SCH 66336 with or without gemcitabine followed by surgery with that of surgery alone in treating patients who have primary liver cancer.

OBJECTIVES: I. Determine the biologic activity and toxicity of neoadjuvant SCH 66336 with or without gemcitabine followed by surgical resection vs surgical resection alone in patients with resectable primary liver cancer.

OUTLINE: This is a randomized, open-label study. Patients are randomized to one of three treatment arms. Arm I: Patients receive neoadjuvant oral SCH 66336 twice daily for 14 days followed by surgical resection. Arm II: Patients receive neoadjuvant oral SCH 66336 twice daily for 14 days and gemcitabine IV over 30 minutes once weekly for 2 weeks followed by surgical resection. Arm III: Patients undergo surgical resection. Patients receive no neoadjuvant therapy prior to resection.

PROJECTED ACCRUAL: Approximately 30 patients (10 per treatment arm) will be accrued for this study.

• Drug: gemcitabine hydrochloride
• Drug: lonafarnib
• Procedure: conventional surgery

DISEASE CHARACTERISTICS: Histologically or cytologically confirmed resectable primary hepatocellular carcinoma or cholangiocarcinoma No metastatic disease outside of the liver

PATIENT CHARACTERISTICS: Age: 18 and over Performance status: Karnofsky 70-100% Life expectancy: Not specified Hematopoietic: Absolute neutrophil count greater than 1,500/mm3 Platelet count at least 100,000/mm3 Hemoglobin at least 9 g/dL Hepatic: Bilirubin no greater than 2 times upper limit of normal (ULN) SGOT or SGPT no greater than 5 times ULN Albumin at least 2.5 g/dL INR less than 1.3 Renal: Creatinine no greater than 1.5 mg/dL Cardiovascular: QTc prolongation no greater than 440 msec Other: Not pregnant or nursing Negative pregnancy test Fertile patients must use effective barrier contraception No malabsorption or other gastrointestinal (GI) condition that would preclude ability to take oral medication and/or GI absorption (e.g., partial small bowel obstruction) No non-malignant systemic disease that would preclude study No active uncontrolled infection No grade II nausea or grade I vomiting despite antiemetic medication

PRIOR CONCURRENT THERAPY: Biologic therapy: No concurrent immunotherapy Chemotherapy: No other concurrent chemotherapy Endocrine therapy: No concurrent hormonal therapy including estrogen therapy No concurrent oral contraceptives or other hormonal methods Concurrent megestrol acetate allowed No concurrent corticosteroids (except for nausea/vomiting during gemcitabine administration) Radiotherapy: At least 6 weeks since prior radiotherapy and recovered No concurrent radiotherapy Surgery: See Disease Characteristics At least 6 weeks since prior surgery and recovered Other: At least 6 weeks since prior systemic therapy and recovered No concurrent CYP3A4 inhibitors or inducers including: Azoles (e.g., itraconazole, clotrimazole, fluconazole, or ketoconazole) Macrolide antibiotics (e.g., azithromycin, clarithromycin, or erythromycin) Cyclosporine Grapefruit Antiepileptic medication (e.g., phenytoin, carbamazepine, or phenobarbital) Antibiotics for tuberculosis (e.g., rifampin or isoniazid) No concurrent HIV protease inhibitors (e.g., amprenavir, ritonavir, or saquinavir mesylate) No concurrent cisapride No other concurrent investigational therapy