The eye represents the eye of God watchng over us. The sun, moon and star stones are representative of the three degrees of glory spoken of in the NT.
What is being taught in the NT is not what Mormons believe.
The square and compass come from the temple of Solomon and are symbols of the stone mason skills.
It is a symbol straight out of freemasonry. It has been proven that freemasonry arose in the 16th century. There was not such symbol on the temple of Solomon.
The star is apparantly just a stylistic choice popular when the original temple was built in the 1840’s. It looks funny today because we are used to seeing a different version.
What version is that? It is ursula major, the big dipper. The constelation of the north star.
"The temple is boxed to the compass. On the west end of the Salt Lake Temple you see the Big Dipper represented, a very important feature (fig. 2). Like the Egyptian temple at Dendera, you had to have the Big Dipper there, representing the North Star, around which all things pivot (fig. 3). The main gate must face east. The sun, the moon, and the stars — the three degrees — are represented there. It is a scale model of the universe, for teaching purposes and for the purpose of taking our bearings on the universe and in the eternities, both in time and in space. And of course as far as time is concerned, we take our center there. We are in the middle world, working for those who have been before and who will come after. We are, so to speak, “transferring” our ancestors (we have their records — all quite recent; and let us remember that the genealogy records were kept in the basement of the Salt Lake Temple, where they belong) in the sense that the work for people who lived long ago makes it possible for them to project their existences into what is to come in the future.
We stand in the middle position. This earth is the Old English
middan-(g)eard, the middle-earth. The
markas &scheckecirc; u er .s ti of the Babylonians means the knot that ties heaven to earth, the knot that ties all horizontal distances together (cf. fig. 37H, p. 151), and all up and down, the meeting point of the heavens and the earth. It is the middle point at which the worlds above and the worlds below join. This scale model of the universe is the temple" (“Temple and Cosmos: Beyond This Ignorant Presence”, Hugh Nibley, 1992, Deseret Book)