President Jose Azona Hoyo declared a state of emergency Friday in the country's two major cities after students smashed shop windows and overturned cars in new anti-American riots.

The presidential press office said the emergency gives police and security agencies wide powers to search premises, make arrests and hold people without trials in Tegucigalpa, the capital, and San Pedro Sula, 120 miles to the north.It also bars street demonstrations and empowers police to restrict travel.

The violence broke out after thousands of students filled the streets Friday, shouting slogans protesting the forced deportation to the United States of a Honduran suspected of drug trafficking.

So many students had left their classrooms by early afternoon that 100 schools and both universities in Tegucigalpa shut their doors.

Shopowners boarded their windows in fear of more violence like the attack on the U.S. Embassy in the capital the night before in which five people were killed.

But looters smashed shop windows, and angry demonstrators flipped over cars. Police patrols, backed by military helicopters, sped through the downtown area Friday, picking up young people.

The government, the principal U.S. ally in Central America, said it would "will take all necessary actions to maintain order and tranquility."

Earlier, officials forced the country's 140 radio stations into a nationwide hookup

controlled by the presidential press office.

In a communique repeatedly being read over the new network, the government urged people to "repudiate violence" and "remain calm," claiming the violence was being secretly instigated by drug barons, who were not named.

About 2,000 university students attacked two U.S. Embassy annex buildings Thursday night and set both ablaze.

They were dispersed with bullets, beatings and tear gas. Police said five people were killed, four men and a young girl, and at least 10 wounded. No Americans were injured.

About 25 automobiles belonging to embassy personnel were doused with gasoline and set afire Thursday.

The students were protesting the arrest and delivery to the United States this week of a Honduran accused of drug trafficking and involvement in the killing of U.S. narcotics agent. They also expressed anger at President Reagan's dispatch of additional American troops to Honduras last month.

Beginning at dawn Friday, Azcona met almost continuously with his Cabinet and Gen. Humberto Regalado Hernandez, the armed forces chief.

On Tuesday, soldiers and police took Juan Ramon Matta Ballasteros from his luxurious Tegucigalpa home before dawn and hustled him onto a plane to the Dominican Republic without a passport.

Dominican Republic officials put Matta on a New York-bound flight and he was arrested aboard the jetliner by U.S. marshals, according to U.S. law enforcement officials.

Matta, held at the maximum-security federal prison in Marion, Ill., was wanted by U.S. officials for questioning in the 1985 slaying in Mexico of a U.S. Drug Enforcement Adminstration agent, Enrique Camarena Salazar.

Honduran legislators called the incident a "kidnapping" and the Foreign Ministry launched an investigation of the procedures used. Honduras has no extradition treaty with the United States and the constitution forbids the extratition extradition of Honduran citizens.