Large piece of artwork, or a fabric panel to fit the inner rectangle? What are the colors of the room?

Not that star. Find something for that space and decorate the mantel with lower pieces.
Reconsider the fireplace screen as it does not fit the opening.

I would remove the star and have a mural painted above the mantle. I would NOT use an iron gate/door like in the picture above of the Lake Residence. It is clearly a door and is totally misplaced so high up. Also, a nice tall piece of art, without frame (canvas) would be nice in there, maybe one with a corresponding arch on top. A third option is a high quality Persian rug. Then, when you have that settled, you can decide what to put on the mantle.

PS. ...and I suggest to paint the vent cover above and to the right of the fireplace with the wall color, it will blend into the wall better.

Here's another option...
Good luck!

Mural or canvas art should look good up there. Not sure what colors you like but here is a few ideas. Best of luck... Raisa http://www.houzz.com/projects/175812/ABSTRACT-ART-vertical

If you keep the star go with large scale sculptures or vase on mantel. The space does get more impact from a large scale artwork in the framed area above.

Some many possibilities. Here's two kinda contemporary original oils and two Italian feeling landscape murals. Hope this helps! :-)