Have you tried Stylize/Mosaic? Place a copy of the clip you want to apply it to on the next higher track, apply the Mosaic effect and size the area with a garbage matte.
Thanks for the suggestion i'll try it
Let us know if it is the solution you wanted.
You cannot make a perfect circle with the Garbage matte.
So try this.
Place clip op Video 1 and copy clip a set also on Video 2
Make a circle (or any other shape) in the titler and make it white.
Place this circle on Video 3
Add the track matte effect to the clip in video 2 and set it to video 3
Then add the Fast Blur Effect and set it to about 60. Done.
If you do not want sharp edges on the mask add the Fast Blur effect on the mask to feather it out.