Campbell said that Ractliffe told her he did not have time to sell the stones, and that he still has them.
Campbell was subpoenaed by the international tribunal following an ABC News report about allegations that Taylor had given her the uncut "blood diamonds".
Until the ABC News report, Campbell had refused to cooperate with the court. Taylor is charged with 11 counts of war crimes and crimes against humanity.
Campbell testified Thursday that she had never heard of Taylor, Liberia or blood diamonds when she met the Liberian president in 1997.
The prosecution first learned of the alleged gift of "blood diamonds" from actress Mia Farrow, who had accompanied Campbell on the 1997 trip and was a guest at the Mandela home the night the diamonds were purportedly offered. After an ABC News report on the alleged gift, Campbell's former agent Carole White came forward and told prosecutors that she was also at the dinner, and was with Campbell later that evening when a group of Taylor's men delivered a half-dozen uncut diamonds.
Campbell was "disappointed" by the stones, according to White's lawyer Daniel Bright, because they were not yet cut to sparkle like the diamonds used in jewelry. Both White and Farrow are scheduled to testify after Campbell.
Farrow told ABC News that she saw Campbell the morning after the dinner. According to Farrow, Campbell was "all a-twitter" when she recounted how she was given "a huge diamond" by Taylor's men in the middle of the night.
In court Thursday, Campbell denied discussing the size of the diamonds after receiving them. She said she had breakfast with White and Mia Farrow the morning after receiving the pouch, and that one of the two women suggested to her then that the gift must have come from Taylor because no one else at the dinner would've given her such a gift.
When ABC News asked Campbell about the incident at New York Fashion Week in February, she denied ever having received a blood diamond.
"I didn't receive a diamond and I'm not going to speak about that, thank you very much. And I'm not here for that," said Campbell.
She stormed out of the interview, slapping a producer's camera.
Less than two weeks after ABC News aired the report about the alleged blood diamond gift, Campbell appeared on Oprah saying that she "did not want to be involved in this man's case," but she did not confirm or deny receiving a diamond. "He has done some terrible things and I don't want to put my family in danger," Campbell told Oprah and her millions of viewers in early May.
Campbell's lawyer, Gideon Benaim, said that she is only a witness at Taylor's trial, and it is not alleged that she has done anything wrong.
"Naomi has not done anything wrong. She is a witness and not on trial herself," said Benaim.
Taylor has been on trial for almost three years at the U.N.'s Special Court for Sierra Leone, which is being held at the World Court in the Netherlands, and has pleaded not guilty to all charges against him.
The warfare in Sierra Leone, where diamonds were used by African rebels and allegedly by Taylor to raise money for a bloody rampage from 1997 to 2001, killed or maimed tens of thousands. Taylor's lawyers have argued there is scant direct evidence that connects Taylor to the diamonds or the atrocities.
"The issue here is not whether such atrocities were indeed committed but who was responsible and specifically was Charles Taylor the person responsible," Courtenay Griffiths, Taylor's lead counsel, told ABC News.
Taylor has angrily denied dealing in blood diamonds. When pressed on the stand in November by Brenda Hollis about whether he sent his men to give a diamond to Campbell, Taylor called the allegation "total nonsense."