Smoke grenades do not work against Caeseans. Well not against the elite ones for sure. And yes, Caeseans can see and snipe your guys from a greater range even during the daytime. Caesians elite see 5~6 tiles further than my soldiers. You can think your safe until you pass the turn and your soldiers catch 3 bursts + 3 snap shots from assault plasma rifles.
And they do have high accuracy indeed. It's like you pass the turn and SUDDENLY, out of nowhere, a shot! Trough the building (two windows and all the props between them) right into the right eye of your unlucky soldier, who crouches 5 tiles away from said building. It should be 5% chance or something and yet they hit and hit hard.
These are the reasons I hate Caesian terror missions: superior vision + superior accuracy + nowhere to hide 'cuz lots of windows all around.