Hamas and Abbas will both reject any plan, for their own internal reasons. Israel is free to accept the plan knowing it has no partner on the other side to implement it. You are right they need an interim step but that interim step is less about land area and more about social order. They have so much more to gain from being peaceful neighbors. The status quo has diabolically robbed another generation of opportunity.
They are, and likely will as they did in 1948. But at the core it's a two party disagreement. Israel's enemies today being greatly reduced from the entire Arab world in the past. No resolution possible without a viable governing body on the other side, but as a plan, could be promising. But peace, that will take longer than the time left to the Trump administration. If, unlike the advocates of Oslo, things like incitement were addressed by the guides of this process, who knows. Netanyahu has always been an advocate of economic development of peace reached with the emergence of an economically successful neighbor. President Trump would be sympathetic, and I'll speculate the plan will have a strong economic component, at least initially with the West Bank. To which they probably won't agree, or an Abbas successor will kicking and screaming. Then there's Gaza, with will require an intervention, of the military variety. The price of militarily destroying Hamas will be high.