Hi,
As alec points out, the voltage at the gate must be 2v higher than the source to turn the MOSFET on. It looks like you are trying to do that through a diode and a floating power source which in itself might not be too bad, but the diode brings in problems.
First, the polarity must be such that it allows current to flow from the source to the gate with the gate being more positive than the source, and this means that the diode has to be connected with the ANODE to the source. Second, the polarity must be such that when the pulse goes to zero it must allow current to flow from the gate to the source, and this means the diode has to be connected with the CATHODE connected to the MOSFET source terminal.
We cant have it both ways, but if we remove the diode then we find that we can get that kind of conduction in either direction, so the diode must go.
Also, the MOSFET must be turned on and off quickly at a frequency as high as 700kHz. This means you'll need a decent MOSFET driver IC for the gate, one that can supply a good amount of peak current like 1 amp or more. It wont work very well trying to drive the MOSFET with a microcontroller chip pin alone.