okruživati

1. to surround
   Selo okružuju šume i brda. — The village is surrounded by forests and hills.
2. (of police, troops) to encircle; to surround
   Policija okružuje zgradu i niko ne sme da izađe. — The police are surrounding the building and no one is allowed out.
3. (okruživati se + instr.) to surround oneself with
   Uvek se okružuje pozitivnim ljudima. — He always surrounds himself with positive people.

The perfective is okružiti.