Prosecutors say the model's testimony could provide evidence that Taylor, who is facing war crimes charges, received diamonds from rebels in Sierra Leone in exchange for weapons during the country's 1992-2002 civil war.
A human rights group monitoring the trial has said the timing of the dinner was important.
"If this story ... is true, it places Taylor in possession of at least one rough-cut diamond the month after the rebels came to see him, and the month before [Taylor's] junta received a large shipment of weapons in October," the Open Society Justice Initiative said.
Taylor has denied the allegations as "nonsense".
The British model told the court that she was awakened in the middle of the night by two men at her door who offered her a pouch containing the stones, as a gift.
Campbell, who said the men did not say who the gift was from, told Carol White, her then modelling agent, and Mia Farrow, a US actress, about the pouch the following morning.
According to Campbell, either Farrow or White said the rocks must be diamonds and were probably a gift from Taylor.
The prosecution says White had heard Taylor say he was going to give Campbell a diamond during the dinner, and that she was there when she received it.
Campbell insisted she was alone when the two men came to her door.
White and Farrow, who both attended the dinner, are to testify about the gift at the war crimes court next Monday.
Campbell said she gave the diamonds to Jeremy Ratcliffe, the-then director for Mandela's children's charity, "to do something good with".
However, the Nelson Mandela Children's Fund has denied ever receiving the diamonds, and Campbell said she believed Ratcliffe still had them in his possession.
Tim Friend, Al Jazeera's correspondent at The Hague, said the prosecution "wants to prove conclusively that Charles Taylor had in his possession these diamonds", that have "become known as blood diamonds".
"If this story ... is true, it places Taylor in possession of at least one rough-cut diamond the month after the rebels came to see him"
Open Society Justice Initiative
"While he was based in neighbouring Liberia, Charles Taylor had a political interest in prolonging the bloody civil war in Sierra Leone and these diamonds were [allegedly] used to finance the rebels there," he said.
"He was obviously using some [diamonds] for his own personal gain as well, according to the prosecution."
Taylor is facing charges of murder, rape, mutilation, sexual slavery and conscription of child soldiers during wars in Liberia and Sierra Leone, in which more than 250,000 people were killed.
His lawyers had filed a motion to delay Campbell's appearance, arguing Taylor's right to a fair trial would be impinged if prosecutors did not provide a summary of her likely testimony beforehand.
The story of the diamond first emerged when Farrow told prosecutors about Campbell's gift.
Campbell had initially refused to testify at the trial, prompting the court
to subpoena her.
Judges have ordered special security measures for Campbell, saying her fears for her safety and privacy are legitimate because of her high-profile status and the intense media interest in her appearance.
Photographers are barred from taking pictures of her inside the court building and as she arrives and departs.