The gradient should not be a problem for modern diesel or electric traction, and if the local authority (Leeds) backs the plan, green belt would not be an insurmountable problem.
Probably the best option would be an electrified link between Guiseley-Airport-Horsforth, and continuation of the electrified system down from Horsforth to Leeds. This would permit the runing of "Circular" Leeds Guiseley-Horsforth-Leeds and vice-versa services which would be a great boon for commuters in the key dormitory towns of Guiseley, Horsforth and Headingley, with the added bonus of providing a great service to the airport.
Main issue would as always be funding, as most of rail transport funds being spent on systems for Greater London and the South East, such as the Crosslink rail system.