The first witness on Tuesday morning told how his village, Balisan, was bombed by chemical weapons.
Ali Mostafa Hama told the court: "I saw eight to 12 jets... There was greenish smoke from the bombs.
"It was as if there was a rotten apple or garlic smell minutes later. People were vomiting ... we were blind and screaming. There was no one to rescue us. Just God."
Hama, wearing a traditional Kurdish headdress, said he saw a newborn infant die during the bombardment.
"The infant was trying to smell life, but he breathed in the chemicals and died," he said, speaking in Kurdish with an Arabic translator.
The witness admitted under cross-examination that Kurdish peshmerga fighters had visited his village before the bombing.
"Sometimes peshmergas, nine or five or three, used to visit our village to get food and blankets. They used to come at night," Hama told the court.
Earlier, two of the co-defendants addressed the court and insisted Anfal was targeted at Iranian troops and allied Kurdish guerrillas in northern Iraq at a time when Iraq and Iran were locked in a bloody war.
Saddam and six other co-defendants are charged with genocide over the campaign, in which troops swept across parts of northern Iraq, destroying villages and killing tens of thousands of Kurds.
Sultan Hashim al-Tai, who was the commander of Task Force Anfal and head of the Iraqi Army 1st Corps, said: "The goal was to fight an organised, armed army ... the goal was not civilians."
"People were vomiting... we were blind and screaming. There was no one to rescue us. Just God"
Ali Mostafa Hama
He said civilians in the areas where Anfal took place were "safely transported" to other areas, including the northern city of Kirkuk.
The orders in the campaign were "to prevent the Iranian army from occupying Iraq at whatever price," al-Tai said.
"I implemented them precisely and sincerely without adding anything or exceeding my powers."
"I never turned a blind eye to any violation," said al-Tai, who later served as Saddam's last defence minister, up until the 2003 US-led invasion of Iraq that toppled the government.
The trial is being closely watched
in Iraq's Kurdish north
Sabir al-Douri, the director of military intelligence at the time of Anfal, said: "The Iranian army and Kurdish rebels were fighting together" against the Iraqi army and that Anfal aimed to clear northern Iraq of Iranian troops.
He insisted the Iraqi government faced a "tough situation" and had to act because the area where the Iranian-allied guerrillas were located had dams that, if destroyed, would flood Baghdad.
He said civilians in the Anfal region had already been removed.
"You will see that we are not guilty and that we defended our country honorably and sincerely," al-Douri said.
The second witness, Najib Khudair Ahmad, a 41-year-old mother with a scarred face she said was the result of a chemical weapon attack, confronted Saddam while she gave evidence.
"If we were Iraqis, why did you bomb us?" she demanded.
Ahmad explained how members of her family died in the attack on the village of Sheikwasan.
"We were blinded. Our men fled to the mountains. I was unable to make it to the mountains. I took shelter in a cave.
My father-in-law died in the village, due to chemical weapons. I could not see, I was blind," she said.
"I know Saddam's aim was genocide. To kill Kurds... I swear by God. I can feel it. Saddam's intention was to kill and cleanse the Kurds."
Saddam and his co-accused are charged with overseeing the death of 182,000 Kurds during the Anfal campaign.
If convicted, they face the death penalty.
The chief prosecutor of the Iraqi high tribunal has said 1,175 victims' testimonies had been recorded with "65 to 75" expected to be called to testify.
On Monday, Saddam refused to enter a plea when accused of masterminding the Anfal campaign.
Ali Mostafa Hama gave his
evidence in Kurdish
The defence is expected to argue that Anfal was a legitimate counter-insurgency operation against Kurdish separatist guerrillas who sympathised with the Iranian side in the Iran-Iraq war from 1980-1988.
Saddam's defence counsel also challenged the legitimacy of a court set up under US tutelage, but Abdallah al-Ameri, the chief judge, and his four fellow judges dismissed his argument.
Saddam has already been tried on charges that he ordered the execution of 148 Shia civilians from the town of Dujail after a failed assassination attempt against him in 1982.
The verdict from that trial is due on October 16.