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.

It appears you need to be standing in the smoke, and yes the smoke is a defensive buff, designed to be used on allies. There should be no problems whatsoever shooting out of it. This is all a bit counterintuitive, but the cover system is pretty abstract so there you go.

Smoke affects everything in the radius of the smoke, INCLUDING enemies. If you are standing next to an alien when smoke is popped on you, it will increase the cover of the alien in the same way (20%). It does not affect cover for things outside of smoke, even if your line of sight on an alien is through a patch of smoke.

Smoke has saved me at least a dozen times so far; it's well worth popping if:

• You have a guy exposed to potentially fatal fire under little to no cover. This can happen if, for example, an alien or missed shot blew up his cover, or if you just had to expose your guy so he could kill an alien.
• You want to provide at least some cover to an area you will move through that has little or no cover of its own.