Step 1
You give the sunrays a fading effect towards the edges. In this example the background is white so I applied a radial gradient from yellow to white with some minor tweaks.
Steps 2
You create two stars (no stroke, red fill initially, width-20 px) and a circle(width 150px), then select the two stars and create a blend using the blend tool(W) so that you have a row of stars.
Step 3
You select both the blended object and the circle and go to Object>>Blend>>Replace spine so that all the stars are on the circle .
Step 4
In order to get the spacing right between the stars you set the spacing options to speciffied steps 11.
Step 5
Now rotate the circle until you get the star and end star aligned horizontally. In order to get all the stars aligned having one corner pointing upwards you need to rotate the initial 2 stars individually until you get the desired position.
Step 6
Select the blended object and go to Object>>Path>>Expand. Now you just need to add another fill color to the stars and place them on top of the sun rays.
