Several thousand Iranians staged an emotional anti-American protest outside the occupied U.S. Embassy today, rallying around the coffin holding the body of an Iranian student who died after being arrested in Nebraska.

"This is evidence of U.S. crimes!" shouted members of the crowd, who claimed the man was tortured by American police. Nebraskan authorities said he died of natural causes.

In another development, Ayatollah Ruhollah Khomeini declared that "Iran will break Iraq and advance to Baghdad." Radio Tehran, reporting the latest attack in the war of words with the neighboring Arab country, said Khomeini told Iran's National Mobilization Committee:

"The people and Army of Iraq must turn their back on the Baath regime and overthrow it . . . because this regime that is attacking Iran . . . is attacking the Koran and Islam."

Meanwhile, a member of the ruling Revolutionary Council, Hojatoleslam Mohammed Javad Bahonar, said the parliamentary elections scheduled for May 2 should be delayed another two weeks.

Khomeini has said repeatedly that the legislature to be elected must decide the terms for the release of the 50 U.S. hostages. The Revolutionary Council must decide the election date and Javad said the delay was necessary to avoid conflict with a national holiday and day of mourning.

Khomeini said tonight that Iranians should not fear economic or military sanctions and he urged Europe not to go along with the U.S. retaliation. His comments were made before President Carter enlarged the U.S. sanctions.

The dead Iranian student, Bijan Ashtiani, 26, had attended the University of Nebraska. He was arrested Dec. 20 on charges of assaulting his landlord with a knife in an argument over the Iranian revolution.

The Douglas County Medical Board committed him Feb. 27 to a Lincoln psychiatric center, where he died April 6. Nebraskan authorities said he died of heart failure "due to an epileptic-like seizure."

Ashtiani's father told the protesters outside the embassy today, "My son was tortured several times by the fascist police of the United States and finally they killed him." He contended that U.S. authorities had asked the young man to become an American citizen, but he refused and was killed.

The coffin was the centerpiece of a small demonstration by anti-U.S. Iranians in Chicago on Tuesday. It was taken to the embassy today after a Moslem service at the Tehran University mosque.

Iranian President Abol Hassan Bani-Sadr was quoted today as saying the U.S. government had violated a secret agreement aimed at freeing the American hostages. He said the supposed deal fell through because the exiled shah evaded possible extradition by leaving Panama. Bani-Sadr blamed that on the United States.

The interview with Japan's Asahi Shimbun newspaper was quoted as saying the purported agreement was reached last month when the United Nations commission was in Tehran investigating Iran's charges against the ousted shah.

Asahi said Bani-Sadr gave the following account:

The U.N. commission was to be given free rein in its inquiry and the U.S. government was not to block Iran from questioning the shah in Panama and arresting him if he was extradited.

Bani-Sadr said the deal fell through when former secretary of state Henry A. Kissinger prevailed upon the shah to flee to Egypt March 23, one day before Iran filed its extradition brief in Panama City. Kissinger has denied any involvement in the shah's move.

In another development today, a firing squad executed four alleged saboteurs, one of them a woman, after they were convicted in a string of bombings and attacks on officials in Iran's oil-rich southwest, Tehran radio reported. Iranian authorities charged they had been trained in Iraq.

The Revolutionary Court of Khuzestan Province handed down the sentence yesterday -- the same day that six persons were killed and 31 others were injured in the latest attack in the province, a bombing in the refinery city of Abadan on the Iraqi border.