Miss Levy told Brentford County Court, west London, that an angry Miss Bassey hit her on the back and called her a "Jewish bitch" after consuming "a fair amount of champagne". Miss Levy, of Mill Hill, north London, said had been asking for a few hours off the next day, following a late-night dinner, when the argument broke out at a hotel in Cape Town, South Africa, on 10 December, 1993.
Dressed in chocolate-coloured fur hat and matching coat, Miss Bassey, represented by Mr Philip Kolvin, sat in court listening to the evidence.
Miss Levy is suing Miss Bassey for breach of contract and claiming a balance of pounds 7,650 for earnings she lost during a tour of the Far East.
Miss Bassey denied hitting Miss Levy - although she admitted pushing her during the argument. The star, who lives in Monte Carlo, also denied sacking Miss Levy and calling her a "bitch".
She told the court she was angry after Miss Levy slammed her bedroom door in the hotel.
"I went after her into her bedroom. I was pointing my finger at her, saying 'Don't you dare slam the door in my face again'," Miss Bassey told the court.
Asked whether she hit Miss Levy, she said: "No, I was waving my finger at her and was amazed when she said 'Do not hit me'. She was hysterical, she was screaming ... she had been acting strange all evening. I wanted to know why she was so angry."
Miss Bassey then admitted she had pushed Miss Levy. She said: "I pushed her here [pointing to her left shoulder]. I did not slap her ... I pushed her."
The singer claimed she had smiled as she left the room, and said: "As I walked out I said 'You are a spoilt Jewish princess'. I certainly did not call her a bitch, I do not use words like that."
Miss Bassey added that the word "princess" was a showbusiness term for someone acting as a prima donna, and said she had been called that herself.
She strongly denied it was an anti-Semitic comment and said she had lots of Jewish friends and associates.