I have two files with bookmarks on my "Ubuntu" system:
This is the system-wide profile, which can only be changed by root. AFAIK, this is used if a new user is added to the system and he/she starts firefox the first time. At this point the user has no bookmarks, and this set of bookmarks is copied into the users home directory under
Any modification by the user will be stored in the bookmark file in his home directory. This file should should be owned by the user, and the user should have read/write permission. I presume firefox will set these attributes correctly when it creates the user's bookmark file.
In order to confirm that firefox does use the file, you might try adding a bookmark, then leave firefox and see if the file date has changed.