* Quake of 7.1 magnitude strikes just off coast
* Sixty houses destroyed
* Death toll might rise (Adds 25 injured, 60 houses destroyed)
By Gustavo Palencia
TEGUCIGALPA, May 28 (Reuters) - A powerful 7.1 magnitude earthquake shook Honduras on Thursday, killing at least five people, knocking down flimsy homes and causing damage in neighboring Guatemala.
The offshore quake destroyed some 60 houses and damaged scores of other buildings across the north of Honduras, a poor country of 7 million people, and briefly triggered a tsunami alert for Central America’s Caribbean coast.
A quake of that size can cause serious damage over a wide area.
Four children, aged 3 to 15, died when their houses collapsed after the quake struck in the early hours of the morning near the resort island of Roatan.
“They were all asleep. Most of them died crushed,” said Randolfo Funes, an official at Honduras’ civil protection agency who said a fifth person died.
At least 25 people were injured and officials said the death toll could rise as reports came in from poor villages and towns in the mountainous area around Honduras’ Caribbean coast.
Security guard Pedro Ramirez, 52, was in his truck outside an office building in the capital of Tegucigalpa.
“I felt the car rock and I started to hear little bits of debris from the building next door hitting the roof,” he said. “It was frightening because it was shaking a lot. I’ve never felt anything like it.”
The earthquake hit 39 miles (64 km) northeast of Roatan, the biggest of the country’s three picturesque Bay Islands, where snorkelers and divers come to see dolphins and a big coral reef. It had a relatively shallow depth of 6.2 miles (10 km). Earthquakes that close to the earth’s surface are often more powerful than deeper tremors.
On Roatan, rescue officials said the quake had knocked out power and caused minor damage to buildings.
Houses also collapsed in Puerto Cortes and Santa Barbara, where the ceiling of an old colonial church caved in, while fires broke out in the northern business city of San Pedro Sula.
The tremor sent people running into the street and the power was cut in some areas.
Foreign ministers from throughout the Americas, including U.S. Secretary of State Hillary Clinton, are to meet in Honduras’ No. 2 city, San Pedro Sula, next week at a gathering of the Organization of American States.
A State Department spokesman said Clinton still planned to attend the OAS meeting and added that the United States was ready to assist Honduras with relief efforts if asked.
Some hotels in San Pedro Sula were damaged.
“Cement fell from the wall in the lobby,” said Dario Melendez, a receptionist at the Honduras Plaza Hotel.
Honduras has a small tourist industry with most visitors attracted to its Bay Islands off the world’s second-largest coral reef that teems with fish, rays and turtles.
Honduras will temporarily shut down the port of Puerto Cortes, where it ships 80 percent of its exports like bananas, coffee and industrial goods.
“There is damaged machinery and equipment,” said Roberto Babum, head of the national port authority.
But a major coffee producer reported no damaged to crops and Canada’s Yamana Gold said its mine in Honduras, the country’s largest, was not affected.
The Pacific Tsunami Warning Center issued a tsunami watch for Honduras, Guatemala and Belize, but lifted it half an hour later.
The quake knocked out electricity in two towns in eastern Guatemala and damaged roads isolated another town in the area. (Additional reporting by Cyntia Barrera Diaz in Mexico, editing by Anthony Boadle)