A two-body interatomic potential model for magnesium difluoride (MgF2) is constructed from the known crystal structure and elastic constants. The reliability of this potential model is critically evaluated through the calculation of structural and lattice dynamical properties of MgF2 in sellaite phase with rutile structure. Energy minimization techniques have been used to predict the lattice parameters and structural properties of MgF2 both at ambient and elevated pressure conditions. It was found that the calculated structural properties are in excellent agreement with the experimental results. Harmonic lattice dynamical calculations have been performed on the equilibriated structure corresponding to the potential energy minimum. The computed phonon frequencies are in good agreement with experimental data and phonon dispersion curves are reproduced just as well. Frequencies calculated throughout the Brillouin zone have been used to construct a frequency distribution function and harmonic contribution to the specific heat is also calculated.