okruženje

1. environment; surroundings; setting
   Radim u prijatnom i mirnom okruženju. — I work in a pleasant, quiet environment.
   Deca brzo uče jezik iz okruženja. — Children quickly pick up the language from their surroundings.
2. (of countries) the region; neighbouring countries
   Cene su kod nas niže nego u zemljama u okruženju. — Prices here are lower than in neighbouring countries.
3. (military) encirclement
   Jedinica je tri dana bila u okruženju. — The unit was encircled for three days.

In the media, "zemlje u okruženju" usually means the neighbouring countries of the region.