Seoul shares rebound; shipbuilders rise ahead of Germany ruling

* KOSPI rises to highest levels in three weeks

* Samsung Elec gains ahead of Apple's iPhone unveiling

SEOUL, Sept 12 (Reuters) - Seoul shares rose to their highest intraday levels in three weeks in early trading on Wednesday, while shipbuilders rallied ahead of a German court's ruling on the euro zone's proposed bailout fund.

The Korea Composite Stock Price Index (KOSPI) rose 1.37 percent to 1,946.22 points, its highest intraday levels since Aug.22, and was set to end two days of losses.

Foreigners turned into a net seller, but resumed institutional buying lent support to the market.

Investors are counting on Germany's top court to approve the euro zone's new bailout fund on Wednesday to lend support to the troubled region.

Optimism is also building that the Federal Reserve will again ease monetary conditions during its two-day meeting that starts on Wednesday to prop up the economy .

"Investors are betting on the Fed's third round of quantitative easing following the weak jobs data," Kim Joo-hyung, an analyst at Tong Yang Securities, said.

Europe-sensitive shipbuilders were among the best performers, with Hyundai Heavy Industries rallying 3.6 percent and Daewoo Shipbuilding & Marine Engineering gaining 3.2 percent.

Samsung Electronics, South Korea's biggest stock by market value, extended gains, up 1.4 percent ahead of Apple Inc's unveiling of its latest iPhone on Wednesday.

Investors also snapped up other large caps, with Hyundai Motor, South Korea's second valuable stock, rising 0.8 percent, and third-ranked POSCO gaining 1.1 percent. (Reporting by Hyunjoo Jin; Editing by Eric Meijer)