All the parts if a new o-ring and spring clip are used and they are genuine MB parts will be under $160. The labor is 1.8 to 2.2 hours depending which book it is looked up in.
About $40-50 for coolant and .5 of an hour labor for that, although it should be included in the job. Our dealer included it for a thermostat replacement on our ML when I was out of town and my wife could not get the ML to warm up.
So $700 seems about $150 too high. Ask them for an exact breakdown of each thing they are doing. If they are including a $130 diagnostic fee I hate it, but most dealers do it.
This is all assuming you are in the USA. IF you are in Canada or Australia then the pricing is of the job is as high as you quoted.