We present a new framework for interactive shape deformation modeling and key frame interpolation based on a meshless finite element formulation. Starting from a coarse nodal sampling of an object's volume, we formulate rigidity and volume preservation constraints that are enforced to yield realistic shape deformations at interactive frame rates. Additionally, by specifying key frame poses of the deforming shape and optimizing the nodal displacements while targeting smooth interpolated motion, our algorithm extends to a motion planning framework for deformable objects. This allows reconstructing smooth and plausible deformable shape trajectories in the presence of possibly moving obstacles. The presented results illustrate that our framework can handle complex shapes at interactive rates and hence is a valuable tool for animators to realistically and efficiently model and interpolate deforming 3D shapes.