Hello, friendly Fiat people, this is my second post regarding my rebuilt 650 engine for my 500F.
I am just fitting a 123 ignition unit (123/Fiat-2-R) with a question on the timing.

Several posts seem to indicate that the static advance needs to be set at 10 degrees (as if a manual distributer was installed), but the 123 instructions indicate that it is installed exactly at TDC / Compression Stroke?

I assumed that the unit automatically sets the advance itself from exactly TDC, but the instructions tell you to 'watch the position of the old distributer' which presumable being manual has had its static advance set.

Having only just got my head around the two different TDC's it would be sweet not to screw up! so any clarification would be greatly appreciated.

Your understanding is correct.
The simple answer is that you fit and set the 123 at TDC.
For simplicity, before you take out the old distributor turn the engine until the rotor points towards either No.1 or 2 plug lead on the rotor cap.
Set the TDC mark on the pulley to align with the TDC arrow on the timing cover (some later engines have several marks).
You fit the new distributor so that its rotor faces appproximately the same direction.
Then do the green light thing as per instructions.
Although it is set at TDC the distributor is actually electronically at 10 degrees BTDC. As soon as it starts to revolve its little brain puts on the correct advance at any given speed or setting.
I was sceptical at first about using a strobe, but after that, ideally you should check that at higher revs, the sparking is actually at 18 degrees.

Hi Peter,
What a rapid response, many many thanks, finger crossed I give it a go in the morning english weather permitting, There was no old distributer in place as I brought and old incomplete 126 engine stripped it and rebuilt it with new parts as needed cylinders a reconditioned head etc etc.
ill let you know how I get on.

Hi Strada Bianche;
Welcome to the Forum---congratulations on building up a complete engine from a 'scrapper'. Where abouts in the UK are you---always interesting to know as it often puts forum members together for some mutual support.

in the south east, ill post some photos when I've heard the sweet noise from the 650!

Huston (or rather Turin) we have main engine start!
unbelievably satisfying!
Thanks again for all you help