If i file married filing separate and i used 1098 for mortgage last year, can my wife use 1098 for mortgage this year?

Yes.  She will enter the form 1098 information on her tax return and you will not.  You also have the option to split the 1098 information (boxes 1 and 2) on your respective returns.  As long as the total interest claimed does not exceed the total interest paid.  A married couple who jointly own and make payments on a home loan can split the interest deduction if filing separately. 

Keep in mind when using the married filing separate status both spouses must use the same deduction type, for example, both must itemize (even if itemizing is less than the standard deduction) or both must use the standard deduction.