When do smoke grenade defense bonuses apply?

Smoke grenades state that they give a +20 to defense to anyone in the smoke (friend or enemy).

However, if someone has to trace a line of sight through smoke to a target on the other side who is not in smoke, does the defense bonus still apply?

Likewise, if I'm standing in smoke and shooting at someone not in smoke, does the smoke I'm in interfere with my shot and make it harder to hit?

In short, I'm trying to understand if I should be dropping smoke grenades directly on my units instead of trying to use them as a screen between me and the enemy.