Lieutenant-Colonel Allen West is charged on three counts - beating Yahya Hamudi, threatening to kill him and firing his gun near the detainee's head during interrogation on 20 August.
The hearing, which started on Tuesday, marks the first time that legal proceedings have been initiated against a senior US officer in Iraq.
West's driver, appearing as a witness, said the officer waved his gun in the air and later fired it after Hamudi refused to talk. The driver, Private Michael Johnson, 20, added that the Iraqi was beaten during the interrogation at a detention centre in Taji, outside Baghdad.
"When he was not giving information that was pleasing to the interrogator or translator, we'd use abusing tactics, mainly striking him," Johnson said.
Asked how hard the detainee was hit, he said: "We weren't hitting him as hard as we possibly could."
The soldiers later pushed the detainee's head into a sandbox used by soldiers to clear their weapons, where West fired shots near Hamudi's head, said Johnson.
West wanted the Iraqi man to divulge the names of people who allegedly wanted to assassinate him.
Johnson said Hamudi was an Iraqi policeman who prior to his detention had taken part in raids with US troops.
An officer who had questioned West after the incident said the defendant had admitted to firing near Hamudi's head and that soldiers beat the detainee, who was yelling and screaming.
The proceedings are expected to last at least two days, and West's civilian lawyer, retired lieutenant-colonel Neal Puckett, said his client was unlikely to testify before Wednesday.
The pre-trial hearing was held in an octagonal, marble-lined room in one of the palaces used as the headquarters of the US army's 4th Infantry Division in Tikrit, the hometown of ousted president Saddam Hussein, 180km north of Baghdad.
A lieutenant colonel chairs the pre-trial hearing, after which he will write a report recommending to the commander who directed the investigation what action should be taken.
A military spokesman said the proceedings were the first against an officer in Iraq reported to occupation offices in Baghdad.