"It's something they should want.
They probably won't want it initially, but I think in the end they will," Trump said of the Palestinian leadership.
"It's very good to them.
In fact, it's overly good to them," Trump added.
The president made the comments in the Oval Office alongside visiting Israel Prime Minister Benjamin Netanyahu, and his remarks come a day before the White House is set to unveil the long-awaited proposal spearheaded by Donald Trump's son-in-law Jared Kushner.
Palestinian officials have refused to negotiate with the Trump administration in protest over a series of steps by the president in support of Israel, including moving the U.S. embassy to Jerusalem and declaring that Israeli settlements in the occupied West Bank are not by definition illegal.
Palestinian leaders say they weren't invited to Washington and that no peace plan can work without them.
Trump hedged his bets on whether the proposal would solve the conflict.
"If we do, it will be a tremendous tribute to everybody," he said.
"And if we don't, life goes on."