I'd start by drawing a 5" circle on the back of a square of yellow fabric. Lay it face down on a piece of lightweight fabric like muslin (or you could use a used dryer fabric softener sheet if you want to be "green"). Sew the two together by stitching on your drawn line.
Cut a 2" to 3" slit in your backing fabric and turn the circle right-side out. Press carefully - you may want to use a knitting needle or something else with a blunt-point end to help smooth out the seam line so that it forms a nice circle.
Pin or glue (using a wash-out glue such as Elmer's) the circle into the desired position on your block. I'd probably hand-stitch it at this point, but you can machine stitch if you're careful and lift your presser foot and gently reposition the block every few stitches.
This method adds a layer of fabric to help give it a bit more stability while you're sewing. Also, the additional layer helps prevent the darker colors of your star from showing through the circle.
Good luck!