Hi!
I am not too sure as to how to respond to a logline, so my apologies if my response is deemed inappropriate.
The core of your idea is very appealing, as it conjures up imagery of a wonderful, magical love story that could be either live-action or animated.
I do feel your logline needs to be streamlined, as some of the details you have may be unnecessary (in my opinion) and only clutter the core idea down.
Here is my edit of your logline, only to be taken as a suggestion (but feel free to use) to your wonderful idea that I think will do really well.
"When an Elf and a Dwarf secretly fall in love, they struggle with the battling prejudices of their two races, as well as a Giant that has come to destroy them all."
By introducing a Giant into your story further along (midpoint, I'd say as a guess), I feel you are creating a new obstacle that ups the stakes of your two main characters who must rally the elves and dwarves together to set their differences aside to defeat their new foe.
Your story immediately brings to mind an interesting new take as a "Romeo & Juliet" meets "The Hobbit" kind of story.
I wish you all the best on success of your idea, as I feel it is truly a compelling, marketable idea.
Grant