"It may be rejected. Could be in the end, folks will say, 'It's not particularly original, it doesn't particularly work for me', that is, 'It's got two good things and nine bad things, I'm out'," Pompeo said in an audio recording of the private meeting obtained by The Washington Post on Sunday.
"The big question is can we get enough space that we can have a real conversation about how to build this out," he said.
The remarks are the most unvarnished comments to date from a US official about Trump's "deal of the century", an effort to resolve the intractable Israeli-Palestinian dispute he has entrusted to his son-in-law, Jared Kushner and former lawyer Jason Greenblatt.
The unveiling of the plan has been repeatedly delayed, Pompeo noted.
"This has taken us longer to roll out our plan than I had originally thought it might - to put it lightly," he said at the meeting on May 28 of the Conference of Presidents of Major American Jewish Organisations, a New York-based group that addresses concerns of the community.
In trying to manage expectations, he said there were "no guarantees that we're the ones that unlock it", in a reference to the frozen conflict. "I hope everyone will engage in a serious way."
He also recognized the popular notion that the agreement will be one-sided in favour of the Israeli government.
"I get why people think this is going to be a deal that only the Israelis could love.
"I understand the perception of that. I hope everyone will just give the space to listen and let it settle in a little bit," Pompeo added.
Two attendees said they left with the impression that Pompeo was not optimistic the plan would succeed.
"He was not in any way confident that the process would lead to a successful conclusion," The Washington Post quoted one of the attendees as saying on the condition of anonymity.
But Elan Carr, the State Department's special envoy to combat anti-Semitism who also attended the meeting, expressed a different view, saying he thought Pompeo "provided a hopeful assessment over the prospect of a peace deal between Israel and the Palestin".
Sunday's development comes after the White House last month unveiled the first part of its Middle East peace proposal, which is being deemed as an economic "workshop" to encourage investing capital in the West Bank, Gaza, and the region.
( With inputs from IANS )